Changes, Changes, Changes

I have been following the stocks of several trucking companies for a bit out of personal interest as well as investment considerations.

Earnings for most companies have been doing quite well despite high fuel prices. I posted recently that Marten had posted record profits. Both Heartland and CFII have done pretty well but Heartland has a lower level of relative deb than TFF and has a lower price to earnings ratio. As TFII reported in a quote above, this will allow them to focus their efforts on the LTL market and, though not stated, reduced their debt level and this may help it sustain industry challenges in the future. However, I wonder if the LTL market is more volatile during recessions as some here have already reported that work is slower lately.

Here is a 12 month history of stock prices for several carriers: stock prices

These kind of changes take place fairly regularly. I think it's silly to believe stock holders are pressuring these companies for more profits. Sure, the publicly traded trucking companies have many different owners, but the primary stockholders are typically family members who took the company public in the first place. They own the majority of shares and they call the shots.

I have considerable (for me) funds in the stock markets. I never dream of having any influence over those companies I'm involved with. I expect them to perform well, but if they can't I simply move on. Having stock in a commodities business like trucking means an investor knows the profits will be slim. Many investors in commodities are more interested in growth than profit. There are a lot of things to consider when investing in public companies. Cash flow is a very critical component when I examine a place to invest funds.

When Knight and Swift merged everyone was debating over which company bought the other. The fact was that neither bought the other. It was simply a merger that kept the family wealth from being split up or destroyed in the uncertain future. It was a smart move orchestrated by family members who had controlling interests by their large numbers of shares.

I remember Swift drivers talking to me at truck stops immediately following the news and saying, "Welcome to the family!" I knew they didn't have a clue. Here we are years later and I'm still working for Knight while they still work for Swift. It was a marriage of convenience to keep the families wealth in the families control.

There's nothing for Big Scott to fear. Things will continue on as they were. The same goes for any of you who find your employer being purchased by another. Sometimes there are issues that arise, but typically these transactions don't affect the drivers.

When it comes to stock performance, the suits typically don't have a long-term view of things. Two bad quarters in a row and changes are expected to be made. In reality, the way SEC regulations are setup, the companies that are publicly traded have a fiduciary duty to make changes when there is a historical trend of less-than-desirable stock performance, which is what the example of 2 bad quarters in a row would be.

CFI is a decent size company that has been a subsidiary of a larger corporation of one variety or another since 2007. Since 2016, the parent company for CFI has been TFI. Heartland Express acquiring CFI, it sounds as though TFI is selling off CFI. Either TFI is needing to purge assets to avoid bankruptcy or TFI has determined that selling CFI will enable its stock to perform better.

These kind of changes take place fairly regularly. I think it's silly to believe stock holders are pressuring these companies for more profits. Sure, the publicly traded trucking companies have many different owners, but the primary stockholders are typically family members who took the company public in the first place. They own the majority of shares and they call the shots.

I have considerable (for me) funds in the stock markets. I never dream of having any influence over those companies I'm involved with. I expect them to perform well, but if they can't I simply move on. Having stock in a commodities business like trucking means an investor knows the profits will be slim. Many investors in commodities are more interested in growth than profit. There are a lot of things to consider when investing in public companies. Cash flow is a very critical component when I examine a place to invest funds.

When Knight and Swift merged everyone was debating over which company bought the other. The fact was that neither bought the other. It was simply a merger that kept the family wealth from being split up or destroyed in the uncertain future. It was a smart move orchestrated by family members who had controlling interests by their large numbers of shares.

I remember Swift drivers talking to me at truck stops immediately following the news and saying, "Welcome to the family!" I knew they didn't have a clue. Here we are years later and I'm still working for Knight while they still work for Swift. It was a marriage of convenience to keep the families wealth in the families control.

There's nothing for Big Scott to fear. Things will continue on as they were. The same goes for any of you who find your employer being purchased by another. Sometimes there are issues that arise, but typically these transactions don't affect the drivers.

The only thing that these moves usually affects for operations level employees is the company name on the equipment/uniforms.

Executive level positions and middle management are the ones who have to prepare for finding work elsewhere.

As of 9-1-22 we are now owned by Heartland. We will still be CFI just like Millis is still Millis and Smith is still Smith. We had a town hall with the owner of Heartland. I was able to be there. He answered our questions and had some very kind words. The want our older trailers gone and new ones coming in. Trailer supply is short and slow right now. They are rolling in. We will shortly be able to use their terminals. As time goes by there my be some small changes. I'm not worried about it.

I also got to run up to dispatch and spend a bit of time with my fleet manager. It was great seeing our ops center back up to full speed with everyone back. Our recruiting department was buzzing as well.

As of 9-1-22 we are now owned by Heartland. We will still be CFI just like Millis is still Millis and Smith is still Smith. We had a town hall with the owner of Heartland. I was able to be there. He answered our questions and had some very kind words. The want our older trailers gone and new ones coming in. Trailer supply is short and slow right now. They are rolling in. We will shortly be able to use their terminals. As time goes by there my be some small changes. I'm not worried about it.

I also got to run up to dispatch and spend a bit of time with my fleet manager. It was great seeing our ops center back up to full speed with everyone back. Our recruiting department was buzzing as well.

I don’t have any problems with trucking company mergers or acquisitions. As long as they keep their governed speed below mine, it’s all good.

Hows it goin now that it's been a few month Scott? Any big changes?

As of 9-1-22 we are now owned by Heartland. We will still be CFI just like Millis is still Millis and Smith is still Smith. We had a town hall with the owner of Heartland. I was able to be there. He answered our questions and had some very kind words. The want our older trailers gone and new ones coming in. Trailer supply is short and slow right now. They are rolling in. We will shortly be able to use their terminals. As time goes by there my be some small changes. I'm not worried about it.

I also got to run up to dispatch and spend a bit of time with my fleet manager. It was great seeing our ops center back up to full speed with everyone back. Our recruiting department was buzzing as well.

Biggest changes, more terminals to stay at, more company shops to use and more company truck washes.

Biggest changes, more terminals to stay at, more company shops to use and more company truck washes.

Sounds like a win, at least from the perspective of a driver.