Another well-written and thoughtful commentary. It is truly amazing how a company, liike Knight-Swift transportation, can have revised its numbers down by 50% from the beginning of the year thru the 2nd quarter report, and yet the stock is up 15% year-to-date, and trading close to all-time highs. Meanwhile, at $60 per share, the stock is now trading at 27x forward price-to-earnings. To be fair, this is what happens at cycle lows, where cyclical companies' earnings tank and P/E ratios rise; however, given the backdrop that you have laid out, it is hard to imagine that we have reached those economic cycle lows. Talk about a divergence from reality.
Agreed, generally buying cyclicals with high multiples works vs. when the company looks “cheap” because that valuation is inclusive of peak cycle earnings. The stock price vs. divergence in fundamentals is very interesting and something to make a note about. Hard to believe that the “E” gets better from here near term.
Another well-written and thoughtful commentary. It is truly amazing how a company, liike Knight-Swift transportation, can have revised its numbers down by 50% from the beginning of the year thru the 2nd quarter report, and yet the stock is up 15% year-to-date, and trading close to all-time highs. Meanwhile, at $60 per share, the stock is now trading at 27x forward price-to-earnings. To be fair, this is what happens at cycle lows, where cyclical companies' earnings tank and P/E ratios rise; however, given the backdrop that you have laid out, it is hard to imagine that we have reached those economic cycle lows. Talk about a divergence from reality.
Agreed, generally buying cyclicals with high multiples works vs. when the company looks “cheap” because that valuation is inclusive of peak cycle earnings. The stock price vs. divergence in fundamentals is very interesting and something to make a note about. Hard to believe that the “E” gets better from here near term.
thank you Aaron this was a awsome report and easy to understand
Thank you for the feedback and happy that you enjoyed!
As always, great information and data
Great insights
Thank you thank you