Mullen Group Ltd. T.MTL

Ink Research

[retiredcf]

Morning Report: Another insider buys as Mullen Group stock gets into gear 

February 22, 2024

We last featured Mullen Group (MTL) in a tax-loss selling alert on December 14th, 2023. The stock had been heading in reverse into the last month of the year, but it has since turned around and is up 5.0% since the report. At one point, the stock was up more than 11%, hitting a year-to-date high of $15.71 on January 28th. It closed Wednesday at $14.79, just above the most recent insider purchase.

When the company reported Q4 and 2023 results on February 15th, operating income before depreciation and amortization (OIBDA) came in at $328.2 million for the year, towards the high end of management's guidance. For Q4, revenue fell 0.8% from a year earlier to $498.6 million. Management explained the drop was driven by lower fuel surcharges and slightly softer freight demand. Moreover, margins improved to 15.9% from 15.4% as direct operating expense performance improved in some segments. Meanwhile, net cash from operating activities increased by 4.5% to $105 million. During 2023, the company reported repurchasing 4,936,143 shares at an average price of $14.60. That helped to boost net cash from operating activities to $1.18 in Q4, up $0.10 from Q4 2022. Looking down the road, in releasing Q4 results Chairman and Senior Executive Officer Murray Mullen said, "We enter 2024 with a greater sense of optimism than at this time last year." He pointed to a strong North American jobs market, the prospect of potentially lower interest rates, and the need for businesses to replenish inventory. He also expects consolidation in the trucking industry which he anticipates will encourage better price discipline.