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.
Inside Airlines: Here’s a PRASM stat for you…
Fuel up, PRASM down, airline stocks down bigger. When will this trend reverse? Well, since January 2001 there has never been a three month period where industry PRASM decelerated for three straight months and jet fuel accelerated for three straight months at the same time. August will likely represent the second straight month of decelerating y/y PRASM and accelerating y/y fuel.
UACL: Acquisition of LINC Logistics Creates Unique Logistics Combination: Details of Merger
UACL announced it will acquire private 3PL LINC Logistics in a stock deal valued at $373M, including the assumption of $150M in debt. We now have a pro forma model available for the combined company based upon its filing of merger documents about a week ago. While we don’t see large synergy opportunities, this deal makes strategic sense to us and will create a top 20 3PL/forwarder in N. America. Pro-forma valuation for the combined company drops to only 10x P/E on our C13 est. while valuation on an EV/EBITDA basis rises due to higher debt levels. While we see upside over time, limited trading liquidity and potential selling pressure from a large secondary likely limit near-term reward.
Inside Freight: USDA Slashes Grain Production Forecasts, As Expected
The USDA updated its projections for the 3 major crops moved by the rails – corn, wheat & soybeans. As expected given the severe drought across the U.S., the USDA materially reduced its corn and soybean forecasts but modestly raised its est. for wheat. Corn and soybean production is now expected to decline 13% and 12% y/y, while wheat production was revised up to +13% (see Ex.1). Total production for the 3 crops is expected to decline 10% y/y vs. +5% previously. This would mark the largest y/y decline since 1995 and the smallest overall grain crop since 2006.
The Wolfe Trahan LEI Rises In The Week Ending 8/10
The level of the WTLEI rose last week in what proved to be a relatively strong week for global equities. Last week was a quiet one for regional PMI reports with the first August PMI releases coming from the Empire Fed this Wednesday at 8:30 ET and the Philly Fed this Thursday at 10:00 ET.
Strength in last week’s WTLEI reading was mainly driven by the strong rise in global cyclical equities as well as strength in the policy outlook. Commodities also provided a strong boost to the overall index. Economic components came in mixed, but together added support to the headline index. Sentiment weighed on the index as each subcomponent came in flat or down.
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