Research Library
Below is our research library, listed in reverse chronological order. Please use the search box to look for research on a specific company or topic, or use the Calendar, Archives, or Sector links at left to browse for research from a specific time period or sector. If you are a Wolfe Trahan client and can not access any of the links in our library, please contact ITSupport@WolfeResearch.com to request our PDF decryption plug-in.
François Trahan Conference Call Replay: Stuck In A Soft Patch Or Recovery Ahead?
François Trahan & Michael Kantrowitz hosted this 1–hour presentation. Topics include: The Evolution Of Bottom-Up Investing In A Top-Down World; Has The Decline In Company Guidance Increased Market Volatility?; The Greater Influence Of Macro And What It Means For Fundamental Analysis; Rearview Mirror vs. Windshield: One Points To Slowdown, The Other To Recovery; The Imminent Return Of The Global Growth Trade; Macro Uncertainty Giving Investors The Opportunity To Reload?; Financials And Technology Sectors Likely To Reclaim Market Leadership; Signposts For Late-Stage Cyclical Sectors Argue For Better Days Ahead; A Deep Dive Into Wall Street’s Favorite Risk Metrics; Could The Recovery In China Be Enough To Offset The Problems In Peripheral Europe?; Implications Of The Recent Decline In European Equity Correlations; and Key Charts To Monitor On The Outlook For Policy, Global Risk And Economic Growth.
Pro Forma Earnings
Since the late 1990’s, some companies have aggressively moved to an alternative measure of their financial performance other than Generally Accepted Accounting Principles (GAAP) in what has become known as pro forma earnings. We believe that Wall Street uses pro forma earnings without proper skepticism and investors may not even be aware of the earnings measure upon which investment decisions are based does not conform to GAAP (i.e., consensus EPS estimates). This report is our detailed assessment of the current state of affairs on the use and abuse of pro forma earnings.
KNX: A Throw-Back to Growth
KNX hosted an Analyst Day in Phoenix which included an informational dive into its business segments. The 2 key themes were its ability to grow profitability through leveraging its decentralized network and cross-selling its products. Mgmt’s intensity remains apparent. We believe we are entering a 5+ year period of large carriers taking share from small carriers into tight capacity, old equipment and cash constraints for smaller carriers. We believe KNX should see the best growth of the large carriers and it’s the first to focus on growing its fleet again. At 17x forward P/E currently after growing EPS 50% y/y in 1Q:12, we believe investors should buy KNX today as it starts to grow its fleet and improve its OR again.
SWFT: Analyst Day Focuses on Transformation to Continued Improvement
Swift held an Analyst Day in Phoenix, which was mostly informational. SWFT announced its target to grow EPS 15% annually the next 5 years, improve Returns on Net Assets by 1pp per year, and reduce its Debt/EBITDA from over 3x currently to 1.5x by C17. SWFT also provided C12 guidance to grow EPS in excess of 20% (implying $0.95+), in line with our unchanged $0.95 estimate and prior Cons. of $0.97. SWFT has come a long way since going private in C07 and we believe it can grow revenue low double-digits the next several years, driven by Intermodal, Dedicated and Mexico. Its focus on process and maximizing productivity is also clear and we expect it to continue to lower its Truck OR to the low 80% range over time. At 11x forward P/E, we see limited downside. We reiterate our Outperform rating.
Research Library
- Coverage List
- Consolidated Research Library
- Airfreight & Surface Transportation Library
- Portfolio Strategy Library
- Quantitative Analysis Library
- Accounting & Tax Policy Library
- Auto & Truck Manufacturing Library
- Airlines Library
- Conference Calls
- Interactive Doh! Models
- Ed Wolfe Bi-Weekly Freight Update