Q: TFII has been weak lately. There was a downgrade on Friday that may have been the reason for a big drop. Is there anything to be worried about? I know TFII is a 5i favourite. Can you go over the strengths and weaknesses that might impact performance over the next year.
5i Research Answer:
TFII had two price target cuts on Tuesday. CIBC's analyst suggested that this was to reflect, "mid-quarter updates provided by a number of US LTL companies, which pointed to a weaker-than-expected August." It seems that there are some near term headwinds related to softer volumes. The business is sensitie to the macroeconomy and can also be cyclical. We still view TFII very positively but would keep a close eye on upcoming quarterly results.