it went up on no volume. the stock seems stuck in a limbo between former growth stock and potential growth stock and people are kind of unsure what to make of it.
yeah looks good. I honestly don't know much about the company but I liked the way buyers soaked up all the shares after earnings and now I've got my fingers crossed and a tight stop
cowen generated $56m of incentive fees/investment gains. at the same time, very little of those fees/gains were captured as profits. Company posted just $18M of earnings. so what happened? is this going to happen every time there are trading gains? it seems like the incremental expenses on trading gains/fees is about 70%.
I'm not short but thanks for the advice. Maybe I am wrong . . . certainly wrong today. But this was an A+ quarter and still only made 18c or whatever it was. Don't think the buyers realize the extent that Cohen&Co are paying themselves first.
some ceo named barry said on cnbc that hiring is very tight in texas, hard to find good people. that's probably why it zoomed up ayesterday. the fact is that oil is spread out across us and texas has diversified. in any case I would bet few of these houses are bought by oil industry people, these are lower-income properties.
Even assuming XPO beats target and does $600M in 2017, that means it's already trading at 7x 2017 ebitda. But mature XPO won't trade at 12x multiple, it's a much higher capex business with higher working capital. More like an 8-10x instead of the 12x that logistics firms usually get. So it means that XPO is already trading pretty close to full 2017 valuation.
There are 105M shares outstanding fully diluted, now that might be as bad as it looks, depending on stuff, but that still a $4B+ valuation, so trading at more than revenue in an industry (truck brokerage) where XPO has made deals for less than 20% revenue (wasn't Kelron like 8% revenue?) So yeah, it's grossly overvalued. But a typical roll-up buys at low multiple and rolls up into a higher multiple. But that's not what Jacobs is doing. He's buying at full value and expecting magic to strike.
Here is Jacobs plan:
Buy at full muliple
Jacobs pretty much confirms the above. XPO has no way in to forwarding. too much concentration/competition in forwarding. little overlap in clients with brokerage. XPO is consuming ton of cash . . . new busineses are consuming far more working capital and requiring much more IT spend. "asset light" maybe but still huge capital hogs.
rlgt is aiming for $1B in next few months (by end of the year, but deals will probably happen sooner) Here's the difference between xpo and rlgt. rlgt already has significant freight forwarder, now it's adding truck brokerage. easier to do vertical integration of forwarder (take truck brokerage in house) than it is to expand into forwarding from brokerage. a fundamentally superior strategy. rlgt is order of magnitude cheaper than xpo but only about .4x revenue if factor in new deals
the consolidation of forwarding is over because radiant already in 100 cities - acquiring new network would mean agents tripling or quadrupling up in some cities, a recipe for defections. so crain has shifted to consolidating truck brokers and "end to end" merger ie Canada. truck brokers was Jacobs original plan, but then xpo got too big. lots of cheap opportunities in truck brokerage, flow it through the ote and msm line haul networks.