发帖
雷达卡
Logistics Initiation
Globalization of the Supply Chain
• We are initiating coverage on the logistics/non-asset based transportation sector with
specific focus on non-asset-based third-party logistics providers (3PLs): C.H. Robinson
Worldwide, Inc. (CHRW), UTI Worldwide, Inc (UTIW), and Landstar System, Inc. (LSTR).
We believe the logistics sector presents an attractive opportunity for growth-oriented investors
seeking exposure to the transportation industry, as 3PLs typically offer both notably high
returns and earnings stability during periods of economic softness. Accordingly, we have
placed an Overweight rating on the sector.
• The Benefits of a Non-Asset Based Model―As 3PLs do not own transportation equipment,
they avoid the bulk of the capital requirements of a typical asset-based transportation provider
and the corresponding risks of underutilized equipment when business conditions are slow.
3PLs also avoid expenses associated with depreciation, asset impairment, and other indirect
operating risks of an asset-based company (e.g., less exposure to fuel price swings and claims
liability coverage). The typically under-levered, variable cost structure has two favorable
implications:
1. High Returns on Invested capital (ROIC) and Equity (ROE)―The five-year average
ROIC for 3PLs is in excess of 30%, with companies such as CHRW and LSTR
typically posting annual ROIC in the high 30s. Indeed, CHRW’s trough ROIC is a
notable 28%―a figure that asset-based providers could only wish for. Returns on
equity are also strong, as evident through a five-year industry average of 25%. This
compares with respective average ROE and ROIC in the trucking industry of 15% and
10%, 9% and 6% in the railroad industry, and 18% and 11% for the global package
providers.
2. Resistance to a Slowing Economy―A variable-cost business model is favorable
during periods of economic decline. Indeed, shares of logistics companies have
historically outperformed the market during periods of GDP decline, offering investors
a “safe-haven” via reduced volatility risk. Accordingly, this defensive stock play is
particularly attractive in the current slowing economic environment.
• Substantial Opportunities for Growth―Increased demand for outsourcing over the past two
decades has driven companies to invest in operations all over the world, particularly in
emerging markets. As a result of this globalization, supply chains have become stretched and
increasingly complex―driving a surge in demand for third-party logistics services. The U.S.
3PL market has increased at a compound annual growth rate of 14.4% since 1996, generating
revenues of over $100 billion in 2005. More importantly, global market revenues are expected
to reach in excess of $500 billion by 2010. As such, we believe that the industry as a whole is
poised for significant growth, particularly in developing nations such as China where demand
for outsourced logistics has recently boomed.
219279.pdf
(505.69 KB, 需要: 2 个论坛币)
京公网安备 11010802022788号
