📈 The Irbis Index November 2024

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The Irbis Index
December 09, 2024

Welcome to the November 2024 edition of The Irbis Index!

The Irbis Index is a monthly dashboard that provides a comprehensive overview of changes within various industries, centered around our core expertise – logistics. 

We’re curious about new ways to leverage asymmetry of information to enhance investor returns.

The Irbis Index is a tool we are developing to reveal hidden correlations between global macroeconomic trends and events and the industries in which we’re investing. 

The Index tracks the market by highlighting key trends of large players across related industries.

On the 5th of each month, we issue the updated Index covering the preceding month, along with all associated trends.

We also provide weekly updates on the Irbis Logistics Transportation Index (ILTA), which tracks the logistics and transportation industry across Europe and North America.

Irbis Index Key:

Industrial REITs: XLON:SGRO, XLON:BBOX, XLON:SHED, XLON:WHR

(New!) Cold Storage and Logistics: XNYS:COLD, XCSE:DFDS, XPAR:STF, NASDAQ: LINE

Lineage, following their IPO on 25th July, now replaces Nichirei in the Irbis Index

Road Freight: XNAS: JBHT, XNYS: XPO, XNAS:ODFL, XNYS:KNX

(New!) Industrial Manufacturers: NYSE: SW, XFRA:KGX, XAMS:CABKA, OTCM:DFKCY

On the 5th of July, Smurfit Kappa completed its acquisition of WestRock, forming Smurfit Westrock, one of the world’s largest packaging companies

Food Producers: XSWX:NESNE, XBRU:ABI, XPAR:BN, XAMS:HEIA, XLON:ABF

Food Retailers: XLON:AE08, XPAR:CA, XLON:SBRY, XAMS:AD

Food Production Equipment Manufacturers: XLON:0R33, XFRA:RAA, XLON:HWDN, OTCM:ELUXY

To find The Irbis Index for October 2024, click here.

The logistics sector experienced widespread selling pressure last week.

The Irbis Logistics Transportation Average decreased by 3.31% over the past week, closing at $957.70.

This marks a significant drop of 32.76 points for the week, driven by mixed company-level performance and broader market pressures.

Biggest gainers:

  • Logistics technology: Manhattan Associates (+6.71%) and Descartes Systems Group (+4.03%) emerged as the top performers, showcasing continued strength.

  • AP Moeller-Maersk (+2.52%) and Hapag-Lloyd (+3.71%) displayed strength in the ocean freight segment.

Notable decliners

  • GXO Logistics (-17.86%) suffered the steepest drop after announcing the retirement of its CEO, compounded by news that the company will not pursue a sale, contrary to prior takeover rumors.

  • Old Dominion Freight Line (-10.16%) saw significant declines, reflecting weak Q4 2024 performance metrics and analyst downgrades.

  • Major carriers faced significant pressure with UPS (-6.76%), FedEx (-5.16%), and CSX Corp (-5.62%) all posting notable losses.

  • The rail sector showed weakness with Canadian National Railway (-3.93%) and Union Pacific (-3.53%) declining on volume concerns.

For more information about ILTA, historical performance, methodology, breakdown by sector and industry, and comparison to major world indices, please visit irbisindex.com.

Relative stock performance (Dec ‘23 - Nov ‘24) 

In November, Road Freight saw the most significant increase, with Industrial Manufacturers also posting gains, alongside the broader S&P 500.

In contrast, stock prices for Food Production Equipment, Cold Storage and Logistics, Food Retailers, Industrial REITs, and Food Producers declined toward the end of October.

Average EV/EBITA multiples

In November, four of the six industries — Cold Storage and Logistics, Industrial Manufacturers, Food Producers, and Food Production Equipment — saw a decline in their EV/EBITDA multiples.

Food Production Equipment now holds the highest EV/EBITDA multiple at 18.48x, surpassing the typically leading Cold Storage and Logistics industry.

On the other hand, Food Retailers continued to command the lowest EV/EBITDA multiple, with the average rising slightly from 5.32x in October to 5.46x in November.

Average Debt/Equity ratio (Industrial REITs)

The debt-to-equity ratio of Industrial REITs increased by 1.6 % this month from 46.7% in October to 48.3% in November.

Top positive correlations

In November, the strongest positive correlation was observed between Meat, Fish & Dairy and Commodities (Livestock).

Top negative correlations

The strongest negative correlation was recorded between the S&P 500 and Food Producers, with a correlation of -0.64.

Target price variations

Between October and November, Cabka fell from the top position to third place with a variation of 105.0%.

Tesco and Kion Group dropped off the leaderboard entirely, allowing new entrants such as Daifuku (131.0%) and Electrolux (55.2%) to take their spots.

Rational AG remained on the list of negative target price variations, showing improvement from a price variation of -31.8% in October 2024 to -11.1% in November 2024.

Additionally, XPO joined the list as a new entrant with a price variation of -2.8%.

Energy

In November, the primary sources of power across countries tracked on the Irbis Index remained largely consistent, with Gas and Wind continuing to dominate as the leading energy sources during the fall months.

However, Spain saw a shift in its top energy source, with Wind (24%) overtaking Nuclear (23%).

If you have any questions about The Irbis Index, please reply to this email with your inquiries, comments, or feedback.

Glossary:

  • Correlation: Statistical measure that determines how two variables move in relation to each other

  • Mean Absolute Error: Percentage deviation of predictions to observed prices over the past year

  • Actual Price: A company’s current value or its market value

  • Target Price: Indicator of how analysts collectively view the fair value of a given stock based on current and past market performance

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