Economic Overview - The Consumer Price Index (CPI) report for December indicates a stabilizing inflation picture in the U.S., suggesting a potential for interest rate cuts in 2026 [1] - The strong start to the fourth-quarter earnings season and ongoing AI momentum have positively influenced U.S. equities as they enter 2026 [1] Investment Strategy - Investors are encouraged to create a winning stock portfolio to capitalize on the favorable market conditions, although selecting outperformers can be challenging due to market complexities [2] - Expert advice from brokers is essential for individual investors to navigate the stock market effectively [3] Broker Recommendations - Brokers favor stocks such as Cardinal Health (CAH), AutoNation (AN), American Airlines (AAL), ArcBest Corporation (ARCB), and Asbury Automotive Group (ABG) due to net analyst upgrades and upward earnings revisions [8] - These stocks are highlighted amid easing inflation and a strong kickoff to Q4 earnings [8] Screening Criteria for Stocks - A screening strategy has been developed to identify stocks based on improving analyst recommendations and upward revisions in earnings estimates over the last four weeks [5] - Key criteria include a low price/sales ratio, significant trading volume, and a market capitalization ranking within the top 3000 [6][9] Company Highlights - **Cardinal Health (CAH)**: A leading healthcare services provider with a projected revenue growth of 16.2% year-over-year for fiscal 2026 and a long-term earnings growth rate of 13.9% [10] - **AutoNation (AN)**: A major automotive retailer expanding its dealer network and digital capabilities, with a 0.4% upward revision in 2026 earnings estimates [12] - **American Airlines (AAL)**: Benefiting from increased air travel demand, but facing challenges from high labor costs and debt levels, with a 7.5% upward revision in earnings estimates [13] - **ArcBest (ARCB)**: A freight transportation company expecting a 42.3% increase in earnings per share for 2026, despite mixed earnings performance in recent quarters [14] - **Asbury Automotive Group (ABG)**: A diversified auto retailer with a focus on digital solutions, achieving an average earnings beat of 8.4% over the last four quarters [15][16]

Core Insights - Less-than-truckload (LTL) rates reached a new high in Q4, driven by carriers exercising pricing power despite limited demand [1] - A modest cooling of rates is anticipated in the seasonally weak first quarter [1] LTL Rate Analysis - The LTL rate-per-pound component of the TD Cowen/AFS Freight Index was 67.9% above the January 2018 baseline in Q4, marking a 100 basis point increase from Q3 and a 490 basis point increase year-over-year [2] - A projected dip of 180 basis points in the first quarter is expected, bringing the rate to 66.1%, which still represents a 220 basis point year-over-year increase and nine consecutive quarters of growth [2] - LTL carriers have maintained pricing discipline, resisting the temptation to lower prices to increase freight volume despite limited demand [3][6] Manufacturing and Economic Indicators - Manufacturing data indicated continued contraction, with the Purchasing Managers' Index at 47.9 in December, a 30 basis point decline from November, signaling recessionary conditions for 10 consecutive months [4] - The new orders index, a future activity indicator, remained contractionary at 47.7 [4] Cost and Pricing Trends - The cost per LTL shipment declined by only 30 basis points from Q3, despite larger declines in weight per shipment (down 160 basis points) and length of haul (down 260 basis points) [5] - Fuel surcharges decreased by 140 basis points during the same period [5] - The sustained high cost per shipment, over 40% above January 2018 levels since Q2 2022, reflects carriers' strong pricing discipline [6] Truckload Market Insights - The truckload (TL) market showed tentative signs of recovery in late 2026, with capacity pressures supporting higher rates, although demand remains flat [7] - The TL rate-per-mile component increased by 160 basis points sequentially in Q4, reaching a level 7.6% above the 2018 baseline, with cost inflation outpacing rate growth [7] - A slight dip of 20 basis points is expected in the first quarter, but the rate would still be 7.4% above the baseline, representing a 120 basis point year-over-year increase and the fifth consecutive quarterly increase [8]

Core Insights - Southeastern Freight Lines has partnered with Fletes México Carga Express to enhance cross-border less-than-truckload (LTL) services between the U.S. and Mexico, aiming for faster and more reliable freight movement [1][6] - The partnership will provide customers with real-time rate quoting and door-to-door shipment tracking, facilitated by associates in Laredo, Texas, and Nuevo Laredo, Mexico [2][3] Company Overview - Southeastern Freight Lines operates a significant LTL network in the Southeast U.S., with approximately 2,000 to 2,850 tractors and over 6,000 trailers, supported by thousands of drivers and terminal personnel across 89 centers [4] - Fletes México Carga Express, part of the family-owned Fletes México, has a strong presence in Mexico with 10 terminals, around 1,150 trucks, and 1,900 employees, providing various transportation services [5] Strategic Goals - The collaboration aims to simplify the supply chain for customers, addressing the growing demand for reliable service in and out of Mexico [3] - Both companies are investing in cross-border infrastructure, technology integration, and operational coordination to support increasing U.S.–Mexico trade volumes, which are vital for North American freight networks [6]

Core Viewpoint - XPO, a leader in asset-based less-than-truckload (LTL) freight transportation, will hold its fourth quarter conference call on February 5, 2026, at 8:30 a.m. Eastern Time, with results released earlier that morning [1]. Company Overview - XPO, Inc. is a prominent player in the North American LTL freight transportation sector, moving 17 billion pounds of freight annually through its proprietary technology [3]. - The company serves 55,000 customers and operates 605 locations with a workforce of 38,000 employees across North America and Europe, headquartered in Greenwich, Connecticut [3].

Core Insights - ClearBridge Investments reported a strong but volatile performance in US equities for Q4 2025, with the S&P 500 Index returning 2.7% and the Russell Midcap Growth Index declining 3.7% [1] - The ClearBridge Growth Strategy achieved its third consecutive quarter of outperformance by maintaining a disciplined portfolio management approach and opportunistic capital allocation [1] Company Overview: XPO, Inc. - XPO, Inc. (NYSE:XPO) is a freight transportation services company with a market capitalization of $17.279 billion [2] - As of January 9, 2026, XPO's stock closed at $146.73 per share, with a one-month return of -1.56% and a 52-week gain of 9.34% [2] Investment Strategy - ClearBridge Growth Strategy rotated its exposure from Old Dominion Freight Line to XPO, Inc. in Q4 2025, citing XPO's potential for idiosyncratic growth amid a challenging macro environment for freight [3] - The company is under new leadership, which is focused on improving service levels, pricing discipline, and margins, suggesting potential for outperformance [3] Hedge Fund Interest - XPO, Inc. was held by 40 hedge fund portfolios at the end of Q3 2025, a decrease from 48 in the previous quarter, indicating a decline in popularity among hedge funds [4] - While XPO is recognized for its investment potential, certain AI stocks are believed to offer greater upside potential with less downside risk [4]

Core Insights - XPO has renewed its partnership with Truckers Against Trafficking (TAT) for the sixth consecutive year, emphasizing its commitment to combating human trafficking in the transportation industry [1][2]. Group 1: Company Initiatives - XPO has trained nearly 6,000 employees in the U.S. to recognize and report suspected human trafficking, equipping drivers with the necessary tools to make a difference [2]. - The partnership renewal coincides with National Human Trafficking Prevention Month, highlighting the importance of resources like the National Human Trafficking Hotline [2]. Group 2: Industry Impact - Truck drivers are recognized as vital allies in the fight against human trafficking, with reports from drivers aiding in the rescue of survivors and disruption of trafficking networks [2][3]. - XPO's ongoing commitment and the training provided to thousands of drivers contribute to safer roads and communities [3]. Group 3: Company Overview - XPO, Inc. is a leader in asset-based less-than-truckload (LTL) freight transportation in North America, moving 17 billion pounds of freight annually [3]. - The company serves 55,000 customers through 605 locations and employs 38,000 individuals across North America and Europe [3].

Company Overview - Old Dominion Freight Line, Inc. (ODFL) has a market cap of $33.3 billion and is a leading North American less-than-truckload (LTL) motor carrier providing regional, inter-regional, and national freight transportation services through a vast network of service centers across the U.S. and strategic alliances in North America [1] - The company combines LTL freight hauling with expedited transportation and value-added logistics services, including container drayage, truckload brokerage, and supply chain consulting [1] - Founded in 1934 and headquartered in Thomasville, North Carolina, ODFL operates a large fleet of tractors and trailers serving a diverse base of commercial customers [1] Upcoming Earnings Report - ODFL is scheduled to release its fourth-quarter results on February 4, with analysts expecting a non-GAAP profit of $1.06 per share, which represents a 13.8% decrease from $1.23 per share reported in the same quarter last year [2] - The company has exceeded earnings estimates in three of the past four quarters, missing forecasts in one quarter [2] Future Earnings Projections - For FY2025, ODFL is projected to deliver a non-GAAP EPS of $4.81, down 12.2% from $5.48 in fiscal 2024 [3] - In fiscal 2026, ODFL's earnings are expected to increase by 9.4% year over year to $5.26 per share [3] Stock Performance - ODFL stock has declined by 26% over the past 52 weeks, significantly underperforming the S&P 500 Index, which rose by 17.8%, and the Industrial Select Sector SPDR Fund, which gained 14.7% during the same period [4] Analyst Upgrade - On December 1, shares of ODFL rose by 5.7% after BMO Capital upgraded the stock to "Outperform," citing the company's strong market position, resilient service quality, and sustained pricing power despite a broader freight industry slowdown [5] - The price target was slightly trimmed to $170, reflecting confidence that carriers focused on smaller shipments typically rebound earlier in economic recoveries, with ODFL's exposure to industrial freight seen as an added tailwind as conditions improve [5]

Core Insights - The integration of the Convoy tech stack into the AscendTMS transportation management system marks a significant step in the revival of AscendTMS, which is primarily known for its load board services [1] - The Convoy Platform, previously developed by the now-closed digital brokerage Convoy, is now fully integrated into AscendTMS, allowing brokers to conduct digital freight matching and transactions [5][6] Group 1: Integration and Functionality - The integration of the Convoy Platform into AscendTMS is described as one of the most comprehensive partnerships undertaken by AscendTMS [2] - AscendTMS connects to approximately 90 factoring companies, enhancing its service offerings [3] - The Convoy Platform requires integration with a TMS to function, as it relies on the data contained within the TMS for broker and carrier collaboration [6] Group 2: Historical Context and Ownership - The "old" Convoy was previously available through AscendTMS before Convoy's closure in October 2023, after which the technology was sold to Flexport and then to DAT [4] - DAT, a subsidiary of Roper Technologies, has now reintroduced the Convoy Platform into AscendTMS, which is positioned as the only multi-tenant TMS supporting this platform [6] Group 3: Operational Process - A load posted to the DAT load board will be processed through the Convoy Platform, enabling instant matching with certified carriers [7] - The process allows users to complete load bookings through full digitization, streamlining operations for brokers and carriers [7]

Core Insights - XPO has renewed its partnership as the official transportation partner for the Susan G. Komen® 3-Day fundraising walks until March 2029, demonstrating its long-term commitment to supporting breast cancer awareness and fundraising efforts [1][2]. Company Overview - XPO, Inc. is a leader in asset-based less-than-truckload (LTL) freight transportation in North America, moving 17 billion pounds of freight annually and serving 55,000 customers through 605 locations [4]. - The company employs 38,000 individuals across North America and Europe and is headquartered in Greenwich, Connecticut [4]. Partnership Impact - The partnership with Susan G. Komen enhances the logistics and participant experience of the 3-Day events, which are crucial for raising awareness and funds for breast cancer [3]. - XPO provides complimentary transportation, storage, and logistical expertise to ensure that event materials reach every city along the 3-Day route, while also encouraging employee participation in fundraising activities [2][3].

Core Viewpoint - A significant theft of a $400,000 shipment of lobster intended for Costco has raised concerns about the increasing trend of freight thefts involving impersonation of legitimate carriers [1][2]. Group 1: Incident Details - The stolen shipment of lobsters was valued at $400,000 (£295,000) and was being transported by Rexing Companies to Costco stores in Illinois and Minnesota [1]. - The lobsters were picked up in Taunton, Massachusetts, but never reached their destination [1]. Group 2: Company Impact - The president of Rexing Companies, Dylan Rexing, stated that the theft was not random and is part of a growing pattern where criminals impersonate legitimate carriers [2]. - The loss from this theft is described as "significant" for Rexing Companies, which is based in Indiana [2]. Group 3: Industry Implications - The theft is expected to drive up costs across the supply chain, which will ultimately affect consumers [3]. - The FBI is currently investigating the incident, highlighting the seriousness of the issue [3]. - Rexing emphasized the need for federal agencies to have modern enforcement tools to combat organized criminal networks effectively [3][4]. - Without improved enforcement, such thefts are likely to continue disrupting businesses and impacting everyday prices [4].