SAIA - Saia: Embedded Expectations Clamp Investment Return At Starting Multiples

2024-07-20 01:23:31 ET

Summary

• Saia, Inc. is a leading transportation company specializing in LTL services with strong financial performance and growth in sales and earnings.
• The company has aggressively reinvested in its business, leading to impressive returns on new capital investments and high operating margins.
• The market has already reflected the company's growth potential in its valuation, presenting a balanced risk/reward scenario for investors.

Investment Thesis

Saia, Inc. ( SAIA ), headquartered in Johns Creek, Georgia, is a leading transportation company specializing in less-than-truckload ("LTL") services through its wholly-owned subsidiary, Saia LTL Freight . Established in 1924, SAIA operates a network of ~200 facilities across 45 states, including relationships with third-party interline carriers for service in Canada and Mexico. With a fleet of ~6,500 tractors and ~22,100 trailers, management has ploughed running FCFs back into this business at a rate of >$2Bn in the last 3yrs on a rolling 12-month basis [it rolled back in 60% of NOPAT in the TTM for instance]....

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