📈 The Irbis Index October 2024

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The Irbis Index
November 07, 2024

Welcome to the October 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.

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 September 2024, click here.

This month we are pleased to announce a new addition to The Irbis Index!

Irbis Logistics Transportation Index (ILTA) is designed to track the performance of key players within the logistics and transportation sector in Europe and North America.

We are focusing on companies that operate in the following industries: Integrated Freight and Logistics, Trucking, Marine Shipping, Railroads, Industrial REITs, Logistics Technology.  

Logistics sector surges amid market rally following US election

ILTA jumped 2.5% today to $988.42 during a session marked by significant market-wide gains, as investors responded to major political developments on U.S. Election Day.

Biggest gainers:

  • Old Dominion Freight Line's remarkable 11.00% gain led the sector

  • Rail transportation showed particular strength:

    • Norfolk Southern: +9.02%

    • CSX Corporation: +8.77%

    • Union Pacific: +6.34%

Biggest losers:

At the same time international maritime companies struggled:

  • Hapag-Lloyd AG: -9.96%

  • AP Moller-Maersk: -4.37%

  • Also, Lineage dropped more than 7% following the earnings call

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

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

In October, Road Freight and Industrial Manufacturers experienced the sharpest increase.

Meanwhile, Food Production Equipment, Cold Storage and Logistics, Food Retailers, Industrial REITs, and Food Producers' experienced a decrease during the end of October.

Average EV/EBITA multiples

In October, three out of the six industries tracked experienced a decrease in their EV/EBITDA multiple, Industrial Manufacturers, Food Retailers, and Food Production Equipment.

Cold Storage and Logistics remains the industry tracked with the highest EV/EBITDA multiple of 20.27x.

On the other hand, Food Retailers continued to command the lowest EV/EBITDA multiple, and the industry recorded a decrease in the average EV/EBITDA multiple from 5.66x in September to 5.32x in October.

Average Debt/Equity ratio (Industrial REITs)

The debt-to-equity ratio of Industrial REITs showed minimal change, declining from 47.8% in July and then maintaining a steady level of 46.7% throughout August, September, and October.

Top positive correlations

The largest positive correlation is between the S&P500 and Food Production Equipment for October.

Top negative correlations

The largest negative correlation was observed between Food Retailers and Commodities (Livestock) which reported a correlation of -0.50 last month.

Target price variations

In October, the ranking of the top positive target price changes remained unchanged from September.

DFDS saw the largest increase among the companies (more than 40% compared to the previous month).

Meanwhile, Warehouse REIT failed to make the list for the fourth consecutive month.

This month, Rational AG remains on the list of negative target price variations, with a slight improvement from -32.4% in September to -31.8% in October.

Furthermore, ODFL and Ahold Delhaize are new additions to the list with a price variation of -4.8% and -0.3% this month.

Energy

In October, the dominant sources of power shifted across most countries tracked by the Irbis Index compared to September.

In Germany, the top power source transitioned from Solar (23%) to Wind (28%), while in Great Britain, it shifted from Nuclear (23%) to Gas (27%) between September and October.

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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