Old Dominion Freight Line (ODFL) short, mcap=$29bn, price $251 vs $260

Short pitch:
– A high-fixed-cost business that has benefited from massive tailwinds (Covid/delivery) and incompetent/ hamstrung competition.
– A recent shortage of drivers and trucks allowed all industry players ($FEDX, $UPS) to increase pricing.
– Management’s ambitions of ever-increasing operating margins (up to 30%) are not achievable.
– Margins are set to shrink going forward.

Valuation: Using pre-covid EBITDA/employee and applying 10x multiple results in a low $100/share target.

Exp. gain: 50% to $130/share.

Full ODFL write-up (free guest account required):

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