Xpediator is on the move! Up 16% today

10th Jun '19 by InvestorJohn

15 comments 2165 reads

Xpediator (LON:XPD)

I currently hold a long position in XPD

Offer price now at 53p up 16% at time of writing

From their website at https://xpediator.com/

"Listed on AIM, Xpediator PLC is a fast growing international provider of freight management services, exploiting the global growth in demand for transportation services driven by e-commerce and economic growth."

This low margin logistics company has its finger in a lot of logistics related pies and was tipped in SCSW at the weekend which has really turned the spotlight on it!

A lot of people are put off by the low Margin and scared off by perceived Brexit impact which the company repeatedly have said should not have a negative impact at all.

This put me off for a while too before I eventually bought in. Still looks like good value on Price to Earnings ratio of 8.67 and PEG of well under 1

Decent Dividend yield too at 4% note that it goes ex dividend this Thursday the 13th of June

Looking at Director Holdings the Directors dealings show that Stephen Blyth (Now Executive Chairman) has a 26% holding in the company

2019-05-03

S.W. Blyth

BUY

500,000 @ 48.00p

240,000

26.47

I feel that the company should see continued positive momentum over the medium and long term as the price re rates as the grow story continues.

The market is not without competitors and maybe you could question the Sustainable competitive advantage here... Alternatives are companies like Clipper Logistics (LON:CLG) which are on a PER of over 12.

I will Hold for now (I am a long term investor after all)

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andrea34

10th Jun '19

I think Xpediator (LON:XPD) are ludicrously undervalued; I bought at end-April and topped up on the silly dip to 45-46p last week

GrahamF

I cannot see that they have any significant sustainable competitive advantages. The very low margins indicate there is little added value in what they are doing. Or, competitive intensity is high so margins will stay low.

They may be serving a niche that has been neglected so far, but once others see their success competitors will quickly arrive with a me too offering.

A major part of their strategy is acquisitions. The problem with that as I see it is the margins are wafer thin and so there is very little margin for error when deciding the purchase price. Over pay even slightly and it will take a very long time for the acquisition to pay for itself.

Even if they continue to grow, the free float is low so there is risk that the owners sell more of their holdings at some point which can limit the share price increase.

As a buy and hold person it doesn’t seem like a great long term prospect but perhaps I am missing something and there is some secret sauce here that will deliver long term value.

Gromley

Just a general observation, buying immediately after a SCSW tip is often not the smart move. Waiting 2-4 weeks can often provide a much better entry point.

Of course nothing is ever certain, the share price could continue to rise without a pause - it happens sometimes.

For me personally I'd be waiting (in fact if I can clear the time in the next couple of weeks I might give Xpediator (LON:XPD) the once over and see what I think)

InvestorJohn

11th Jun '19

Agree that waiting can be beneficial to let the tip related inflation wear off... The market makers had the price pushed up at the open yesterday knowing that there would be buyers in attendance!

Hi Graham - thanks for your points above

I think for me the hope is that the EPS growth continues at the current pace and that the share price will gradually re rates to reflect this.
I will be picking up over 4% in dividends while I wait and feel that the downside risk is limited to a certain extent at the current price

I am not sure if you have seen the various Investor presentations that are available? The information in them regarding the scope of Xpediators' activities gave me confidence too.

Pardon my ignorance..... but what is SCSW?

Chip50

https://www.scsw.co.uk/

john652

Having watched SCSW & the Monday morning prices for many years there seems to me a correlation. Highly likely market makers are aware of SCSW as the prices often gap up on opening, and very often are up a considerable amount on the Thursday/Friday (very suspicious).

This normally only happens when confidence is high or returning, nov & Dec, very little moved. Yesterday eagle eye, dialight, expediter, pressure technologies , and a couple of others, were all were up 10-15%. Despite all the media gloom, no change there, I think small cap confidence is ok and increasing, ignoring tetail of course, and this price movement supports that.

To Gromleys point, I agree, mostly it pays to wait a couple of weeks.

Thanks Chip; I think I came across this years ago.

Can't afford that as well as Stocko.... and I think I know which I'd rather have :-)

andrewdb

The MMs know as a lot of retail investors put orders in over the weekend.

The opening auction matches buyers (usually PIs) with sellers (some PIs but I suspect a lot of the stock at open comes from the MMs book).

The MM can make a tidy profit at that point and as Gromley notes, often buy back over the next 1-2 months.

I do subscribe to SCSW.
One small gripe: SCSW's model portfolio is based on dealing on (say) 3/6 but your price will be the one on 10/06. As such it is rather flattering to SCSW.
One big recommendation: I have had the immense ability to pick 'story' stocks.
Now I keep a list of SCSW's recommendations - where a lot of dross has been filtered from a qualitative pov - and use them as a place to start reading the stories. then the last accounts / reports.
This is the same as what I do with Stocko, but stocko is quantitative.

The benefit of making one less mistake a year outweighs the cost of both subs (to me obvs ymmv)

Tonysaparito

14th Jun '19

SCSW is just like a popular racing tipster...the bookies are waiting for the punters to pile in early, and even after 15 years of following SCSW every Monday after publication the same thing happens.Let the froth settle, in the meantime do your research , and then selectively dip your toe..There are lot of dogs tipped on SCSW but also some future stars .As for Xpediator , I like this business despite low margins as it is asset light, has a couple of good businesses in its operation .But for me it’s a good long term play because the costs involved in the electrification of HGV trucks in the future is going to cause enormous consolidation in the logistics market , and Xpediator , can still operate on small margins knowing all those new trucks need loads ..Plus , as we wind up to electrification all those diesel HGVs will be worth less and less ..at the same time the cost of diesel will drop like a stone ..so asset heavy logistics companies who operate their own fleets will come under pressure..Xpediator , can be immune to all the change, as long as it can offer high volume low margin scale..Blyth , has been around a long time and offers a very unusual offering in a competitive market but the future changes in logistics will allow future acquisitions to be brought in on low PEs ..This is a share to buy and do nothing with for 5 plus years..ignore the noise and sit on Xpediator

30th Jul '19

Boom profits warning... Materially below expectations!
I got out of this at the open at just over 35p it is better to have companies beating expectations than to hold this through what looks like a lot of pain and uncertainty in the future.

I agree, I'm out.... at a big loss :-(

nathantrader

I am a holder will exit today, ouch did not see that coming.

On a positive note we get the final dividend tomorrow it is as below from the Final results

The Board is pleased to recommend a final dividend of 0.84 pence per share. The proposed dividend, if approved by shareholders, will be paid in July 2019, to shareholders on the register at the close of business on 14 June 2019.

Xpediator is on the move! Up 16% today

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InvestorJohn

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