Some 80% of Chinese goods move around the country by truck, so road logistics are a key barometer of China’s economy. Since that economy is deep in malaise, trucking ought to be slowing, right?
Not according to a company we looked at over a year ago. It’s going gangbusters and even buying back stock. So were we just wrong? Did we miss a consolidation play?
Nope. We’re sticking to our guns. This company gets around half of its pre-tax income from interest on IPO proceeds sitting in investment accounts. It repurchases stock as executives sell. Nice work if you can get it but it’s not about industry growth or core company services.
Our original report is still waiting for a key catalyst for the stock to drop. Read on.