Loomis currently trades at 4.0x EV/EBITDA (2027E) and offers an annual unlevered FCF yield of ~13–15%. Our framing is simple: if Loomis manages to grow FCF by 2% p.a. through 2033, it effectively recovers its entire EV — leaving any residual value as upside. We view that as conservative.
Thanks for this one, very interesting. Loomis does seem undervalued and the price looks nice. But I still do wonder about the future of cash, despite your great insights. Maybe more, I wonder about Loomis's return on capital. Lower than I'd like. Is that a worry to you too? In any case, thanks again. Well done.
Thanks for reading along - and fair comment! As to the future of cash, I think we - and everyone else - is probably aligned on its diminishing role. It is the pace of that shift, and whether it will get completely phased out, where I believe the dislocation is present. The return on capital is not much of a worry for me at this point. It is in the upper-end of wider logistics peers. More importantly, the direction of ROIC (i.e. incremental returns on capital) is headed the right way.
Thanks for this one, very interesting. Loomis does seem undervalued and the price looks nice. But I still do wonder about the future of cash, despite your great insights. Maybe more, I wonder about Loomis's return on capital. Lower than I'd like. Is that a worry to you too? In any case, thanks again. Well done.
Thanks for reading along - and fair comment! As to the future of cash, I think we - and everyone else - is probably aligned on its diminishing role. It is the pace of that shift, and whether it will get completely phased out, where I believe the dislocation is present. The return on capital is not much of a worry for me at this point. It is in the upper-end of wider logistics peers. More importantly, the direction of ROIC (i.e. incremental returns on capital) is headed the right way.
That concern surrounding the long term future of cash is what kept me away too.