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Released on Monday, October 24, 2011, 8:00 AM ET
Pittsburgh, PA (SpeculatingStocks) - We haven’t talked about transportation and logistics recently, so here is a company in that sector that is looking sexier than ever: XPO Logistics Inc. (AMEX:XPO).
XPO is a business service unit specializing in transportation of cargo through truckload brokerage. But what is really interesting with this company is it is recently under new management; on September 2nd, 2011, Bradley Jacobs issued a private equity investment of $150 million dollars into the company, well over its enterprise value of $90 million, effectively giving a fuel injection to the corporate structure and bringing it public.
Bradley Jacobs is currently sitting as the CEO and Chairman of the Board of XPO, and we expect to see a nice growth in this company under his leadership. Mr. Jacobs has been the chairman and co-founder of many companies including: United Rentals, Inc.; Hamilton Resources Ltd.; and United Waste Systems, Inc. At the ripe age of 55, he should be a welcoming addition to the XPO team.
XPO currently runs a market capitalization of around $87 million at a price of $10.65 per share (4:00 PM EDT, October 21st, 2011) . The firm’s EPS is at $0.54 per share on a yearly basis, and it has a P/E around 19.59. XPO has a current ratio of 1.84, and a strong book value per share of $4.48.
One thing is for sure, XPO is not suffering from cash flow movements, as it holds a free cash flow of $2.7 million, coming from an operating cash flow of $4.3 million. Another plus to hold against the volatility of such a small company is a favorable beta of 1.3 and a strong support in the markets for this company with institutional investors holding over 35% of the stock, and another 20% being held by insiders. This means that half of the outstanding shares are relatively open to trade, but also that stability is partially built into the company.
It also means that the insiders are going to work to increase profits, funneling them to the share price, increasing the stocks appreciation and their gains, so a strong incentive on their part to perform well. Overall an interesting company to keep an eye on as it develops and further integrates with Jacobs as its new leader.
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