February 13, 2020 | Blog News / Updates White Paper

Industry Perspectives | Transportation Investor Feedback: What it Means for Your IR Program in 2020

Alpha IR is one of the only experienced options for transportation companies who need a strategic investor relations partner to navigate the challenging environment expected in 2020 and beyond. The issues that small- and mid-sized transports face today are numerous and are going to require thoughtful communication to appropriately guide Wall Street through another tricky year in 2020, as well as all of your other important stakeholders.

On behalf of our transportation clients, our team is in regular communication with institutional investors and we want to share some of their recent feedback, noted below, as we found it to be both timely and thought provoking. This direct feedback was collected throughout the last few months and should help you as you finalize your strategic IR plan:

  •  “2018 was a difficult year for the sector. During the downcycle, most companies chose to enact some element of self-help to prepare their business for the next upcycle. We believe that these programs will start to have a meaningful impact on operational performance in the second half of 2020. Thus, we are looking forward to seeing how these initiatives start to build momentum and how they will help companies take advantage of somewhat improved economics next year.”

– Portfolio Manager, $25B GARP Firm

  • I think today’s typical transportation investor is a little confused and maybe still a little bit shellshocked. We have just been through a very strange period from an investors’ point of view over the last two-to-three years. First, we saw transportation and freight rates spike up in 2018 and everyone needed trucks and/or increased rail; however, we hit 2019 and there was a large oversupply combined with lower demand. And so far, recent earnings calls aren’t supporting any short-term rebound for these stocks. These kinds of quick and dramatic fluctuations are not how it’s supposed to work, and if you’ve been observing this industry over the last 20 years, then you likely struggled to time this cycle appropriately as an investor. We’re hoping to see these stocks develop more constructive and less volatile markets as we move through fiscal 2020.”

– Portfolio Manager, $6B Value Fund

  • “The freight environment is going to be what drives earnings performance. However, the market, macroeconomic uncertainty, and the news cycle are what will dictate the multiple upon which those earnings are valued. The multiple is going to fluctuate over the next several quarters, a lot more so than earnings. That is something that can’t be controlled by management teams. They will need to understand it, and message through it instead of trying to fight it. I also can’t stress enough how much transportation companies need to stay visible to investors during times like these. Now is the time to tell your story and build credibility, when your stock is cheap and the market’s attention is elsewhere.”

– Analyst, $1.5B Value Fund

As you can see, these comments point to significant, strategic questions about the go-forward path of your company and your peers. To summarize the top issues and skillset that Alpha brings, please see the table below:


About Alpha IR Group:

Alpha IR Group is a full-service investor relations consulting firm that partners with companies to deliver best-in-class investor relations, from strategic insights to daily, tactical execution. Alpha IR offers a range of tailored programs, as well as sophisticated insights and significant experience with activist preparedness, investor day preparation and execution, earnings support, M&A/transaction support, perception studies, and more. The firm’s leaders have over 100 years of combined sell-side, buy-side, investment banking, and IR consulting experience. The firm has offices in Chicago, New York, and Boston. Alpha’s growing staff supports a client base that spans seven industry verticals and represents nearly $100 billion of equity value trading on public exchanges in North America.

Alpha-IR Group
P: (312) 445-2870
E: info@alpha-ir.com

 

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