XPO Logistics, Inc (XPO)

A US logistics company. They will route and ship whatever products for you. This includes where it will be picked up, how it gets transported, and where it is going, as well as handling all the custom forms and way bills that are needed. They also own Conway Trucking which they bought last year in order to do the “last mile”. They’ve reached the inflection where they are starting to generate free cash flow now. Management has guided $500-$800 million of free cash flow in 2018, and that is on a $4 billion market cap company. You are either going to get a 25% upside or it could be a double by 2018.

This handles freight, last mile globally. It has been an acquisition story where it has been gaining the scale to do logistics businesses globally for major companies. This is going to benefit from all the e-commerce trends. It also has very, very strong organic growth for the next few years, despite a really weak overall freight market. Well-managed. Has incredibly strong earnings growth for the next couple of years.