Some stocks are already maxed for the year
2020 ended with a hot market that has not cooled off yet this year, and trucking stocks have capitalized on that momentum. On this episode of Great Quarter, Guys, Andrew Cox and Seth Holm discuss if those stocks have hit peaks and how the stocks rose in the first place.
Before they break it down, it’s time for your weekly “you care or nah?” segment.
First up, Uber has announced its acquisition of alcohol delivery service Drizly. While Holm doesn’t care, he says it does come as a surprise, and he expects Uber to possibly run into regulatory issues with the delivery of alcohol.
Next, ocean carriers are blanking salings not due to demand shortages, but to continued port congestion, and this is a big deal to both Cox and Holm. Holm says tender rejections keep growing in port cities due to these backlogs and COVID-19 outbreaks are exacerbating things.
UPS earnings are out at a record $24.9 billion in revenue, which Holm says is huge for the shipping company. Cox agrees, with UPS ringing in a banner quarter of growth, up 21% in Q4. The company performed well in service metrics as well despite a 20% increase in volumes and extra stress caused by the pandemic.
In the core discussion Tuesday, Cox and Holm discuss the downgrade of some key trucking stocks. Holm says “2021 may be as good as it is going to get,” and stocks may start decreasing in value as spot rate inflation continues to grow.
Holm says that brokerage cycles have a big impact on stock valuation, especially for asset-light companies with contract-based revenue. He says if you’re a transportation investor, it is better to enter the stock cycle early for asset-heavy companies but that’s not the case for those asset-light groups.
You can find more Great Quarter, Guys recaps and recaps for all our live podcasts here.
