TFI International Inc TFII

Ink Research

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Morning Report: TFI International drives up the INK Edge rankings 

February 26, 2024

North American trucking firm TFI International (TFII) was a top mover up the INK Edge rankings last week, driving from a mixed outlook into mostly sunny. Relative price momentum and insider commitment helped TFII gain ground within our Canadian stock rankings universe. As much of the investing world focused on AI, TFII hit a 52-week high of $200.98 on Friday. The move came following TFII's 2023 earnings report on February 8th. Earnings were US$5.80 per diluted share, down from US$9.02 a year earlier as operating income fell. Net cash from operating activities increased by 4% to US$1.0 billion, helped by an increase in non-cash working capital of US$254.1 million.

Revenue before fuel surcharges was US$6.4 billion compared to US$7.4 billion in 2022. TFII attributed the drop to weakened market conditions in terms of both volumes and pricing. TFII has traditionally taken an active acquisition and disposition strategy. Last year, it sold operating unit CFI's Truckload business and some other segments to Heartland Express (Mixed; HTLD) for US$525 million. The sale reduced 2023 revenue, but that was offset by US$550.9 million in revenue from other acquisitions. As it moves through 2024, TFII will be prioritizing Less-than-Truckload segment growth by focusing on service improvements. It also expects its Truckload segment to benefit from its announced acquisition of North American trucker Daseke (expected to close in Q2). If all goes to plan, TFII expects the transaction to be accretive to shareholders in 2025 based on current market conditions. Meanwhile, net volume insider buying as the stock trends higher has pushed the stock's INK Edge ranking in the right direction.