XPO piqued my interest because of its sheer undervaluation – trading at less than a half of ODFL’s EV despite having an almost similar EBITDA!
While this looked too appealing, a deep dive into the company changed my opinion to the contrary.
Allow me to present both the Bull and Bear cases in this deep-dive.
CARR provides an asymmetric opportunity resulting from the valuation dislocation after its spinoff from UTX.
In April I wrote an exclusive thesis on VIC about the asymmetric opportunity presented by the valuation dislocation from the spinoff of CARR. Since then the stock has risen by ~70% vs. a range of between 5-20% for Trane, Johnson Control and Lennox. Now that the exclusivity period for VIC is over and I still maintain half the position I am writing a concise version of the thesis which could help anyone gain an understanding of investing in the HVAC industry.