GXO Logistics and Stock Market Sentiment

Episode 55 - GXO Logistics & Stock Market Sentiment

This is episode 55 of The LongVol Report Podcast – welcome back and for the new listeners, welcome. Make sure to subscribe to the Spotify/YouTube – we put this out each Thursday with the Pod/video out on Fridays, you can ask questions each week here and I’ll do my best to answer.

Welcome back – There was no show last week due to me traveling so we’re going to combine last weeks article into this weeks.

Last year I made the change to talk more about Portfolio Management and I think that leaves a lot of new investors out of the picture and I never would have even started posting online a decade ago if it were for not helping newer investors sort it all out. So, going forward, this show will focus more on charts and technical set-ups from The Report and 1-2 ideas I am watching each month that are Portfolio positions we’re tracking to give some color as well as continue the Broad Market notes each week.

It’s Friday evening here in Dubai as I get this out so let me share some photos with you all (if you care) then we can get into this weeks show.

This week we’ll talk about:

Broad Market Update
Last Weeks Article (EL/HSY Updates)
SPX and Broad Market Thoughts
GXO Logistics – A Brad Jacobs Company
Charts & Setups
Q&A

Now on Spotify

The Broad Market: Stock Market Sentiment

We’re finally getting some bids on the broad market this week even though the data may not make sense the charts and price action always do. $530 was key on the $QQQs and $6050s was key for SP500 futures – both we’re above at the time of this post. What we’ve seen the last month (and good for me being away from the desk) is range-based trading which is great for the futures traders but bad for the broad market. It’s also been earnings season which is a time for us to look at names we own, want to own or may make it to the report to track.

As expected earnings season was okay but many of the Mag 7 names have not done much and we’ll get into some charts on those.

As far as data goes we’re still playing the tariff headline game (Trump 1.0) and the market still thinks we’re getting more than 2 cuts hence the sell off on CPI then subsequent buying later that day.

Stocks like $PLTR and $BROS are having big weeks despite the financials and that’s just been the theme for as long as markets have been around – by that I mean sometimes you just need to smash the buy and join the crowd.

One cut this year maybe two still
Concerns valuations are getting rich (same theme as a while back)
Article from Barrons: The Stock Market is Getting Expensive

The thing about rate cut and hike cycles is that everyone gets it wrong because they’re early. The fact that we’re discussing rate cuts at this point is a joke but that’s the market we’re in. No cuts for a while but the market will pretend as if it will change….

Most bears since early Nov ’23, which marked the end of that 10% correction. Bears up 13% in two weeks is also rare. Saw that at the end of the 10% Fall correction in ’23, March ’23 and the regional banking crisis, and late Sept ’22 near the end to that bear market. In other words, when investors are this worried, a large fall from here would be quite rare.

Still lagging the broad market here but $AAPL and others have seen some signs of life recently. There are a few that are getting close to A+ short setups based on the charts alone that we’ll cover later.

We covered this name last May into the end of Summer earnings and sold out of the position. The financials just were not turning around and management is DOA – the best case scenario is a take private here it seems and there was a rumor of such.

GXO Logistics

GXO Logistics is the world’s largest pure-play contract logistics provider, offering advanced warehousing and distribution solutions, including e-commerce logistics. Operating in 27 countries with ~130K employees, the company manages 974 facilities (613 leased, 2 owned, and 359 customer-owned), encompassing 199M square feet. GXO’s services include high-value-add warehousing, order fulfillment, reverse logistics (returns management), and other supply chain solutions.

GXO became an independent company on August 2, 2021, through a spin-off from XPO Logistics. This strategic separation was designed to create focused entities, with GXO specializing in contract logistics and XPO concentrating on freight transportation. In November 2022, XPO further spun off RXO, a tech-enabled brokered transportation platform, resulting in three independent companies: XPO, GXO, and RXO.

Since its inception, GXO has pursued growth through strategic acquisitions. In May 2022, GXO acquired Clipper Logistics for $1.3B, significantly expanding its presence in Germany and Poland with over 50 sites, 10M sq ft of warehouse space, and 10,000 employees. In October 2023, GXO strengthened its North American operations by acquiring PFSweb, a tech-enabled eCommerce order fulfillment platform, for $181M. Most recently, in April 2024, GXO completed the £762M ($957M) acquisition of Wincanton, substantially increasing its market presence in the UK and Ireland.

2025 guidance concerns on organic growth have the stock lower
They had a bonafide $85 offer in October to be bought out
Reported full year revenues of $11.7B up 20% from 2023
For FY25, GXO anticipates organic revenue growth between 3%-6%, adjusted EBITDA between $840-$860 million, and adjusted EPS of $2.40-$2.60. However, the consensus for FY25 adjusted EPS was higher at $3.09, indicating a possible adjustment in expectations.

Charts of The Week

This week on charts of the week we’re going to cover:

SP500, Nasdaq, Russell 2000
$GLD, $WPM
$PLTR, $HIMS, $RIVN, $LYFT, $UBER
$MSFT, $META

Final Word.

Issue 7 is out Sunday – US Markets closed Monday
Remember you can get the Substack membership for $40/month with the weekly market-timing/technical video & members blogs

This is opinion, not advice.