Josh Kohn-Lindquist's avatar
$17.1m follower assets
FedEx up 15% on 53% Dividend Raise
Also added Jim Vena, former COO of $UNP and $CNI (a couple of dividend-growers that have done alright over time), to its board, along with Amy Lane from Merrill Lynch's investment banking group.

I still really like the dividend potential $FDX has -- even after this significant bump.

The payout ratio should remain below 25-30% for 2022 and 2023, and EPS/FCF generation should continue to rise along with the company's improving margin profile.

They still need to execute on integrating their TNT acquisition and tiptoe through this market, but things look promising.
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"A Freight Recession is Imminent" says Freightwaves
Amid the supply chain crisis, transportation companies have been firing on all cylinders. With a flood of orders, transportation companies have been able to charge more for their services.

For the railroad companies like $UNP and $CNI, they've been able to charge clients storage fees since they didn't have enough space in their trains to transport all the goods that needed to be shipped.

As for the cargo ship companies, they were able to charge a lot more for contracts. $RH CEO was notable for talking about it in his earnings call about inflation.

And for the truckers, it's a mixed situation. With a tight labor market, they have more negotiating power than ever. However, with higher fuel prices, more routes are becoming unprofitable for truckers and companies are either stepping up and offering more pay for truckers or are choosing to wait out for a possible freight recession.

Freightwaves, a notable blog that covers the transportation sector, has a great track record of predicting the future movements of the sector. They're predicting another freight recession coming soon. Here are a couple of quotes that explain their thesis:

"The typical trucking cycle is three years and usually what kills it is oversupply – too many trucks chasing high-paying spot freight and high load volumes."

"The problem is that capacity expansion always continues well past the peak and can even continue for a time after the market has entered a recession."

The core of Freightwave's recession call is the tender rejection rates. This measures the willingness of truckers to accept or reject a load. If the rejection rate declined, it means that capacity is loosening.

This is the chart that Freightwaves posted. it looks like truckers are receiving less business now and could see themselves enduring conditions similar to that of the pre-pandemic and early COVID economy.

It's important to note that March is usually the time when truckers receive the most business. This March however hasn't been too hot. Retail stores seem to be less serious about stocking up their shelves for the summer. A weak March implies a weak economy for the rest of the year. That's how important March's data was.

To conclude, it's possible that we could be seeing a freight recession in the near future. Trucking companies are going to be the most impacted. Cargo ships continue to have pricing power as ports continue to deal with the massive line of ships and trains will be seeing less revenue from storage fees.
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Pretty frighting stuff! Let’s hope they’re wrong for all our sakes. What do you think it would take to prove their prediction wrong? What events would have to happen or what catalyst for change could take place that would turn this back on track?
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Upcoming Earnings Calendar (Jan 24-28th) - BIG week ahead!
Hey guys! Here's the upcoming earnings calendar! Definitely a very busy week ahead. Here's what I'll be looking at:

  • $MSFT - Can Azure keep its growth rate? Will a slowdown cause a sell-off similar to the one $NFLX had?
  • $TSLA - Post earnings reaction. This is one of the few high-growth stocks that has shown relative strength. Let's see if this changes post ER.
  • $LOGI - Is demand for gaming peripherals still strong? May be an early indicator of videogaming strength.
  • $AAPL - It's always interesting to hear what Apple is doing.
  • $V - Data on consumer spending.
  • $CVX - General comments on the energy market.

If you'd like an easier way to track earnings dates, you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.

MON:

TUE:

WED:

THU:

FRI:
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Featured earnings for the week of Oct 18
Earnings season (finally) getting into full gear!

So many interesting companies announcing earnings next week. Here are is the Fincredible Featured list. View all here.

Here are some I own / or particularly interested in

$JNJ - very interested to see results in the medical devices segment. Specifically are their signs of closing the gap with $ISRG with their new platform and are elective surgeries coming back

$ISRG - flip side of the $JNJ narrative. I love it when competitors announce close to each other :)

$NFLX - international subscriber numbers

$T - update on discovery spin-off, dividend and 5G capex

$XM - $MNTV is my top 3 holding based on thesis they are making inroads in enterprise market, which $XM dominates. Big enough market for both but want some context.

A few companies like $PG on inflation numbers, but I suspect @awallis will be kinda enough to provide a MacroTalk update on this topic again

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