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  "docSlug": "15874954effa",
  "documentTitle": "XPO Logistics, Inc. (XPO)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2018-12-13 00:00:00",
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  "notes": "Includes specific callout box explaining the selection of peer companies for comparison.",
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      "kind": "callout",
      "text": "Shaded companies specifically mentioned as best peers for XPO's large acquisitions of Pacer Int'l and Con-Way (2)",
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      "kind": "callout",
      "text": "Highest industry earnings growth rate at risk of material disappointment absent acquisition",
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      "kind": "metric",
      "text": "P/E: 28.5x",
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      "kind": "paragraph",
      "text": "XPO Logistics has morphed from a traditional third party (asset light) logistics provider into an integrated provider of transportation and logistics services (capital intensive). As a result, we believe it should receive a lower multiple more closer to larger integrated peers such as UPS and Fedex, albeit at a valuation discount to reflect its suspect accounting and low quality management and Board, with demonstrated associations to convicted felons and a Ponzi scheme. (1) We believe 2019E estimates are too high, and XPO will fail to deliver a material acquisition as it struggles with fundamental headwinds.",
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      "kind": "quote",
      "text": "We use modestly above-peer multiples of 12.5x and 7.6x for each of XPO's respective parts in recognition of organic growth opportunities in a diverse number of large markets bolstered by high-quality management — JP Morgan",
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      "kind": "source-note",
      "text": "1) Stock promoters such as JP Morgan claim XPO should trade at a premium, \"We use modestly above-peer multiples of 12.5x and 7.6x for each of XPO's respective parts in recognition of organic growth opportunities in a diverse number of large markets bolstered by high-quality management\" Nov 1, 2018\n2) Pacer and Con-Way Fairness Opinions. In addition, XPO's proxy statement benchmarks itself against UPS, Fedex, CH Robinson, and Swift",
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      "kind": "table",
      "text": "Peer comparison table with columns for Stock Price, Ent. Value, Sales Growth, EPS Growth, P/E, EBITDA, Sales, Price/Book, Net Debt/EBITDA, and Dividend Yield.",
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      "kind": "title",
      "text": "Valuation of Public Comparables",
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      "evidence": "Comparison of XPO against peer groups (Logistics, Integrated, Truckers)",
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      "arcName": "Overcoming the Monster",
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      "name": "Cost Of Inaction",
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      "bestFor": "Urgent budget requests, compliance, risk mitigation",
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      "evidence": "The conclusion and valuation tables highlight the potential downside risks",
      "position": 2,
      "objective": "What are the potential consequences of not selling short or avoiding XPO stock?",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
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