We Study Billionaires - The Investor’s Podcast Network - TIP652: Best Quality Idea Q3 2024 w/ Clay Finck & Kyle Grieve

Starting point is 00:00:00 You're listening to TIP. On today's episode, Kyle and I will be covering our best quality stock idea for Q3, 2024. This is the quarterly series where we share a quality stock that we find to be interesting and worth considering for our own portfolios. Even if you aren't interested in individual stocks or necessarily interested in the company we're covering today, you may find value in hearing our own thought process for how we think about analyzing a business. This quarter, we're going to be covering Old Dominion Freight Line.

Starting point is 00:00:29 Over the past 20 years, Old Dominion has been one of the best performing stocks in the market, as their shares have compounded at 23% while the S&P 500 compounded at just 10% with dividends reinvested. This seemingly boring best-in-class trucking company outperformed well-known companies like Amazon, Costco, and Microsoft. During this episode, Kyle and I are going to share what we learned from studying this business in its history and why we believe it will be a strong performer going forward. We also share the insights we learned from other investors we chatted with who own this company, such as Chris Mayer and Shre Visbenathan, both of which are previous guests on the podcast. If you missed our previous three episodes of our Best Quality Idea series, I've linked

Starting point is 00:01:12 them in the show notes in case you're interested in checking those out as well. And at the end of this episode, Kyle and I also discussed the live events we have coming up with our TIB Mastermind community. With that, I hope you enjoy today's episode on Old Dominion Freight Line. celebrating 10 years and more than 150 million downloads. You are listening to the Investors Podcast Network. Since 2014, we studied the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected.

Starting point is 00:01:47 Now, for your hosts, Clay Fink and Kyle Greve. Welcome to the Investors Podcast. I'm your host, Clay Fink. And today I'm joined by my co-host, Kyle Greene. for our Q3-20204 best-quality idea series. Kyle, how are you doing today? I'm doing excellent. I'm looking forward to this episode. I am as well. So Kyle and I, we oftentimes consider ourselves to be what we can call quality investors. And we found that many in the audience have resonated with that investment approach as well. And although there are

Starting point is 00:02:28 many ways to win the game of investing, many of the best investors, Kyle and I have interviewed on the show and just studied through various books and such, have adopted this approach of more generally just buying high-quality businesses at fair prices. So this is what this series is really all about. For those not familiar, the best quality idea series is where my co-host, Kyle Greve and I, we do a deep dive on a quality stock that we believe is worth taking a closer look at. So this is the fourth episode we've done in this series, and I'll be sure to get the others linked in the show notes for those that are interested because it's been quite well received by the

Starting point is 00:03:03 audience, especially those that are interested in learning more about how we analyze a company or just interested in some of the companies that we're looking at for our own portfolios. So on today's episode, we're going to be covering a company called Old Dominion Freight Line. A lot of people probably haven't heard of this company or haven't really dug into it. But to my surprise, this happens to be one of the best performing stocks over the past 20 years. I recently came across this list of the stock market's best performers over the past two decades. And to my surprise, Old Dominion came in at number seven. So this seemingly boring, best in class trucking company that we're going to be getting into,

Starting point is 00:03:41 it outperformed well-known companies like Amazon, Costco, and Microsoft. But that is the backdrop. I wanted to dive in to the company's history here. To learn more about the history, I picked up this book titled Helping the World Keep Promises by Jeffrey Roddengen. And it really gave an overview of the company's long history and how they got to where they are today. The company was founded in 1934 by Earl Congdon Senior

Starting point is 00:04:08 and his wife, Lillian Congdon. And in the beginning, they just had a single truck and they were just a family trying to get by. They did a daily route from Richmond to Norfolk, Virginia. And being founded during the Great Depression meant that they had very, very humble beginnings. And they tell a story in the book about how a couple of years into the business, they wanted to buy a water cooler for $36 so they can enjoy cold drinks on these

Starting point is 00:04:33 hot summer days. But they didn't even have $36. They had to go out and finance this sort of purchase and paid off over the year, which just sort of points to some of the humble beginnings that they had, starting in the Great Depression. So as any great business, they expanded the company. They started hiring their family members. And throughout the book, you see many of these same patterns just repeated over and over again. So they would have trouble with unions from time to time, they had to weather through tough economic periods like any great business did over its long history. The trucking industry is quite tied to the overall economy. And over time, the company just put more and more of an emphasis on providing a high quality

Starting point is 00:05:11 service in addition to expanding their reach, oftentimes doing so through acquisitions. But that hasn't been much of their strategy nowadays. One of the key early setbacks, I think is worth mentioning, was that Earl Congdon Sr., The co-founder, he unexpectedly passed away at age 43, and his wife, Lillian, really played a major role in keeping the company alive. And then Earl Sr. son, Earl Jr., he stepped up to be a general manager at age 19. And one of the important takeaways for me personally from this book is that the trucking industry is just a brutal, brutal industry to be in.

Starting point is 00:05:46 It's highly commoditized. Many companies just go bankrupt and don't make it over the long run. and these unions really put significant pressure on many of the players. So there was a statistic in the book that really just sort of blew my mind. So Old Dominion, they're an LTL trucking company and I'll be getting into what that really means. But of the top 60, only eight of them remained 23 years later in 2003. The rest either went bankrupt or were sold off.

Starting point is 00:06:10 So overall, this industry is just absolutely brutal for the companies in the space. I think that given how much pain Old Dominion has gone through over the years, it's led to them just being humble, not resting on their laurels and ensuring that they just continually offer the best service possible and to ensure that they're running a really lean operation. Another brutal story I feel like I have to mention was the union strikes from 1959. It was just amazing to read. The union workers were striking and they were wanting to get a fair pay. So they weren't showing up to work at Old Dominion.

Starting point is 00:06:44 And the management team was actually able to get people to replace these workers that weren't showing up. The fact that Old Dominion was able to keep their operations going without the union workers just made these workers just absolutely furious because they weren't getting what they wanted. So they started just opening fire, shooting at the people that are working and throwing dynamite. They blew up one of the terminals. And it's just amazing to read about that because it's just not something that's even heard of today in the United States. So the strike ended up lasting just over a year and almost brought the company down. But they ended up surviving. And over the long term, it's just been an incredible growth story.

Starting point is 00:07:23 I think another key part to highlight from the book is just the family culture within Old Dominion. Earl Jr. is the son of the founder. He joined the company in 1946 at age 16. He served as CEO from 1962 to 2007, and he still sits on the board today. And then Earl Jr.'s son, David Congdon, he was CEO from 2008 to 2015, and he's currently the executive chairman of the board. And David, like his dad, Earl Jr., he joined Old Dominion very early in life to learn just every aspect of the business. He started out the company at age 14. And after college,

Starting point is 00:08:00 he was a truck driver for the company, which given their financial means at the time, like he certainly didn't need to be a truck driver, but it just sort of points to the culture, I think, which is quite interesting. So the concept of these family roots and family values are deeply rooted in Old Dominion's culture. I also mentioned they put a big focus on providing a high quality service. I think this has allowed them to charge higher prices than their competitors in a highly commoditized industry. And since Old Dominion really wants to avoid being a unionized company, they had to essentially just provide a really good place to work because they didn't have that supportive unions. So while the union workers would fight for these small raises, oftentimes you'd

Starting point is 00:08:40 see Old Dominion just focus on the business, focus on solid execution. and then typically the Old Dominion workers would end up getting better raises because of these superior financial results that Old Dominion oftentimes got. And nowadays with corporate America, I think a lot of companies simply look at what decisions are going to maximize the bottom line for today. But these family-owned businesses, I think they just look to do what's right. And even if it might negatively impact to the bottom line in the near term, they're optimizing for the long-term strength and health of the business. And this idea is actually expanded on in Chris Mayer's book 100 baggers. And since I mentioned that book, Old Dominion has been a 300 bagger since the IPO in 1991.

Starting point is 00:09:20 And also to give some examples of Old Dominion thinking long term and not giving into these shorter term pressures that can be tempting at times. We look at the great financial crisis. Some of the other trucking companies, they were lowering prices in light of weak demand. And Old Dominion, they just kept their prices where they were at, keeping their higher prices. This was really so they can assure that wages and benefits weren't cut. And this really helped keep employee morale up. I think it would have been really easy to follow just what other companies did and just lower prices, let go of people and cut back on wages and benefits.

Starting point is 00:09:55 But when a crisis hits, I think time and time again, Old Dominion has showed that they're willing to make the difficult and unconventional decision, just like many other family-operated companies is what you see with those too. An employee also shared a few stories in the book about the family culture I thought was quite interesting. She talked about how one employee had been with the company for 15 years and he was having health issues. And Earl Jr. had told that gentleman's manager that as long as he wanted to work with Old Dominion, they were just going to let him work there. And Earl Jr. knew that this gentleman wasn't particularly financially well off, but he had invested in much of his life with Old Dominion.

Starting point is 00:10:32 So Earl Jr. wanted to really ensure that he was well taken care of. And then there's one other story I'll point to here of how one of the Old Dominion managers, his father had died in 1991. And then David Congdon, he was actually the president at the time. He was a pallbearer at the man's funeral. So, of course, some of these stories are from many, many years ago. But I think it sort of points to the company's history. And sometimes these small acts that you can catch really stand out and give us a glimpse

Starting point is 00:10:59 into the DNA of the company and the culture. That's right, Clay. I think like you pointed out, they really have. a family feel to the entire business. And I think in the book that you mentioned and that I also read, they did a really good job of displaying that and showing why they highlight some of their employees who have been with the business for such a long period of time and how they've maintained that family culture throughout, you know, multiple decades now. So while reading the book, I had a couple more notes that I think are really important that helped me learn just a bit, a bit more about the

Starting point is 00:11:28 history of the Kongan family. So I feel that throughout the book, they do a really good job of showing that the Kongans really, really cared about the business. They had multiple ups and downs, obviously like Clay mentioned, Earl Kong Sr. passed away and that was a big loss to the business. But Lillian stayed on and brought her two sons who were literally just teenagers to help run the business and they just kept it going despite the fact that she actually had multiple offers to sell. Lillian, she's left the business and had to come back and multiple times. For instance, when Earl Sr. was still around, she wasn't super involved in the business, but then when he passed away, she had to come back. And you just kind of get the feeling that

Starting point is 00:12:01 legacy of this business really matters for the Kongdens and that old dominion. And that old dominion, is part of that legacy. I mean, Earl Jr. He's kind of retired now, but he has an advisory role with the business, so he's probably still poking around a little bit. And, you know, he's 90 now. And like Clay mentioned, he started at 16. So he's been there for a long, long, long, long period of time. So I think there's really something to be said about the strength of having owner operators at the head of a business. So I was re-listening to a part of Clay's interview with Chris Mayer that he had about Hunter Bankers. And Chris had some really good points on the interview about why family-owned businesses with these really high levels of insider ownership are just super

Starting point is 00:12:38 powerful. So Chris listed a few points that I found really fascinating. And these are patterns that you'll see along the lines of many family-owned businesses that also have these kind of long-term shareholders that are owning the business and running it. They're more likely to think long-term. They're looking more to build for the future and all the present. So I think Clay showed a really good example of that during the financial crisis where, yes, they could have cut their prices. And even when they cut their prices, they actually knew that they were going to lose some customers because people were going to just go with a cheaper opportunity. But they knew that over the long period, it would be better for not only the business, but also the morale of their employees, which clearly has done very well for

Starting point is 00:13:13 them. So another thing is that these family owned businesses are less likely to think short term. Same kind of thing. They don't necessarily care about the next quarter, right? They know that they're going to own these shares for maybe they've already owned it. It's been part of the family for decades. They know that hopefully they're going to pass these shares onto their kids and let it keep going. So they're really, really not worried about what happened in the short term. And now that they've been doing this for decades, they know that it's cyclical and you're going to have downturns. Another thing is that most of these family-owned businesses kind of avoid giving guidance. And that can be a big plus because it lowers the chance that you're going to disappoint shareholders. I think it also just kind of

Starting point is 00:13:47 speaks to the long-term nature of how they look at the business. As an investor, I want to hopefully align myself with people who are running the business who also are shareholders. And so a lot of these insiders have large blocks of shares because they found out of the business. Oftentimes, they founded it as a private business and, you know, they might own 50%, 60%, 70% of all the shares, right? And so as the business goes longer and longer in the interest, public markets, obviously they get diluted, but they still end up having quite a few shares. And it's really obviously a bonus when they don't really sell any of their shares too. That's a really nice thing to see. A few more things here. So these kind of long-term family businesses, they tend to be more

Starting point is 00:14:22 conservative with their use of leverage. So as Clay points out with quality businesses, you know, These are types of businesses that you can hopefully hold for a long period of time. And having the ability to not be scared of going out of business due to having excess leverage is a huge bonus. That's an interesting one because you'd think that whether you're family owned or not family owned, you wouldn't necessarily want to use too much leverage. But I think that because of the families really being embedded in the business and wanting it to succeed and also caring a lot about their employees, maybe that's why they're less likely to use leverage. So I had a point to add there.

Starting point is 00:14:54 It's interesting how when you have managers that think on just different time horizons, so you might have company A with a hired hand type CEO who is really just sort of ensuring he doesn't lose his job and ensuring that the company gets by over the next, say, one, two, three years or whatnot or even just hit their targets over the next quarter. Just that mindset shift to like a legacy. The legacy piece that I think you mentioned were like, what's my son and my grandkids? I'm going to think about my decisions when they look back 10, 20, 30 years from now. I think that sort of mindset shift can be really powerful and it can really lead to just vastly different

Starting point is 00:15:32 sort of businesses and business models. I know we were going to also tie in copart and kind of compare them to Old Dominion, but you see a lot of similarities how you have this industry, whether it's trucking or they use car sales that coparts in. I think you can look at companies within these industries and how just the differences between them is just like enormously different when you look at the balance sheet, the return on capital and whatnot. And it just really just, this is why the family operator aspect is so important in my opinion. Absolutely, Clay. And we'll be going over management a lot more in depth later on this episode. But needless to say, even though they have managers who are no longer Congdens, these are managers who've been with the business for a really

Starting point is 00:16:09 long period of time. So I think they're trying to kind of continue on with that family legacy point of view. So just kind of getting back, the final point I wanted to make on that Chris Mayer point was just that a lot of these family-owned businesses are a lot more resilient to economic shocks and are more likely to survive due to their high levels of conservatism. So you already may give that really good example of how they survived through the great financial crisis. And even though they did take hits during that time, they ended up all the better for it. Through researching, I also came across this really interesting McKinsey report that talks about some of the secrets of why family-owned businesses, which they called F-O-Bs, outperform. So they actually found that family-owned businesses deliver higher

Starting point is 00:16:46 total shareholder returns than non-family-owned businesses. Now, Chris has said that you can find conflicting evidence to either side. So, I mean, it kind of depends on where you're starting your numbers at and whatnot. And he actually just discussed this the other day with us with the community. But, you know, I still think there's something to be said that I think that family-owned businesses just, they're really strong. And there's some evidence there that shows that they can outperform non-family-owned businesses. So the reason for this outperformance that the McKinsey report gave was just that basically these companies have better underlying operational performance. They basically outline four mindsets. So two of them I kind of already discussed, which was the long-term view and the conservative

Starting point is 00:17:25 use of debt. But then they had two others that I found really interesting that I haven't really touched on yet. So the first one there was just a focus on purpose that's beyond profit. And then the second one was an improved process that allows for efficient decision making. So I'd like to go over those both in a little more detail here. So as the book is called and the company motto is it's helping the world keep promises. So I think that this purpose alone, it is beyond just making profits for the business. So I think the business knows that if they keep this motto and fulfill the motto to their customers, profits will just take care of themselves and they don't necessarily have to just worry about the profit part of the business. And then a couple of other aspects, I think that the business shows that

Starting point is 00:18:04 they care more about a purpose is just, you know, they have this profit sharing program with employees that helps keep the employees loyal to the business and working well. But, They really want their employees to stick around. And there's multiple examples of employees that have been there for multiple decades. So that's a really cool thing to see. If you go back to when Earl Sr. passed away and Lillian Congdon took over. As I kind of discussed earlier, she actually fielded multiple, not just one, but multiple offers for the

Starting point is 00:18:29 business because, you know, I guess the vultures came peck and thinking that they could maybe acquire ODFL at a discount or whatever because she didn't want to have anything to do with the business. But even though maybe she could have used that money, she didn't sell the business. she wanted to hold on to it because it was her and her husband who created that business. And I think she just wanted to keep building it because they'd been doing such a good time for such a long period of time. So I think maybe it's changed now compared to then, but it feels like they have this history where money's not the only motivation for building up the company.

Starting point is 00:18:57 And then just looking at some of the kind of improved processes that they've made. My best example here was just with the current chairman and former CEO, David Congdon, who just has a really good history of creating a lot of value for Old Dominion over his entire career. So one of his first major tasks that he had when he was with the company as he started moving up the ranks was running the Old Dominion Furniture segment. This was a segment that kind of, it wasn't a very high quality part of their business. I mean, it wasn't profitable. They were constantly losing money. I mean, yes, they had sales, but part of the reason he wanted to join there was to see if he could turn it profitable. So when he first started, it was making about $12 million

Starting point is 00:19:33 dollars per year in revenue, but it was losing millions of dollars in profits. So it was kind of a drag on the overall company. But David, through just improving the processes of that segment of the business, was able to turn it profitable. So that's kind of his first big win with the business. And then as he took over the CEO, he did several things to help streamline the business. And I think help continue getting that operations ratio lower and lower, which Clay is going to go over in a little more detail here for you. So a couple of these initiatives he did. So he invested in the dockyard management system, which is just a simple way of going from paper to digital records, which it doesn't seem like a big deal now, but that was pretty groundbreaking technology back in the day. He also utilized technology to help improve the routing

Starting point is 00:20:13 of freight and service centers. And then, you know, they did things like researching, losing and profitable accounts to help improve the processes, maybe get rid of the losing ones or find out why the ones that were losing were losing and improve upon those and maybe, you know, double down on your winning accounts. So, you know, just kind of simple things. But these are really interesting processes that I think he did to help make the business better. And then the last one here I just wanted to mention was he helped standardize the terminal routines and processes to make it easier. for employees to work at different locations. So that one was really important because part of Old Dominion, the interesting thing about it is that, you know, they have this network of service centers.

Starting point is 00:20:46 And so a lot of them are pretty close by. But if you have one employee that maybe you want to move from one service center to another service center, it could be really hard if the service centers all have different processes. And that was kind of a problem that David was running into. So they weren't able to really move one employee from one service center to another. So they standardized the processes so that one person could theoretically move from probably one side of the country to another side of the country and still understand the processes of the business. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer.

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Starting point is 00:25:21 logistical nightmare that companies like Old Dominion have to deal with. And you mentioned also the technology that they've had to invest in over the years. It's still something they are focused on today. So here I wanted to transition to give an overview of the company today now that we've gone through their history. Old Dominion Freight Line is really as simple to understand business for the most part. They operate in what's historically been known as an industry that is really, really difficult to do well in. And I think if you like boring businesses with long track records of doing really well, achieving high returns, then I think this company is worth taking a look at. So Old Dominion, they're a transportation and logistics company that offers a variety of services

Starting point is 00:26:03 primarily in what's called the less than truckload shipping, which we can really just refer to as LTL shipping. They primarily operate in the U.S., but they also have a little bit of presence in Canada and Mexico, but I think most of the focus as investors should be on the U.S. So really there are two major types of trucking companies. They're what's referred to, as truck load, where the shipper fills up the truck, and then the trucking company hauls it from point A to point B. LTL is the other major type of company within the trucking industry, and this really just consolidates shipments from a number of different customers. And given the nature of the LTL industry, a significant investment is needed in the service

Starting point is 00:26:43 centers and all the technology and logistics that goes behind it. And you can think of Old Dominion's trucks. They have all these different types of packages, all these boxes, and they may have a truck filled from a number of different customers. And logistically, it just makes it much more complicated than if you just pick up one item from one location. There's a lot of logistics that goes into this business. So the trucking industry, one thing that's nice about it for the Congdon's and the management team is that this industry is not fast changing and it's not something that's going to be

Starting point is 00:27:16 highly disrupted overnight, like many technology companies, for example. And it's all about just getting a product from point A to point B. in doing so in an efficient and a reliable manner. And Old Dominion is really, really good at doing just that. So logistics professionals, they assess everybody in the industry and they give out what's called the Mastio Quality Award. So Old Dominion Freight Line, this just really sort of blew my mind when I started digging into it. So they've won this award for 14 years straight. In the most recent year, they had 28 different categories of determining who wins this. And of the 28 categories, they won, in 25 of them. So these categories include things like meeting their delivery promises. They're looking

Starting point is 00:27:58 at the number of damaged products. They're looking at the consistency of their transit times, how easy it is they are to do business with, and all these different metrics they're looking at. So these types of metrics are critically important because in many ways, the shipping industry to at least a number of customers is very much a relationship type business. So there are a lot of customers who don't view this as a commodity and they aren't purchasing just based on price. They care more about the consistency, how easy the trucker is to work with, the reliability, and price is also in consideration, but it's not the only one. So even if Old Dominion charges more for their premium services, they're still getting their share relative to competitors. So when we look at market share

Starting point is 00:28:42 and how that's changed over time for Old Dominion, in 2002, they had just under 3% market share in the industry. And today, that's just a market share. under 12%. So their market share is up 4x over a 20-ish year time period. And the industry over time has become more consolidated. So the top 10 players control anywhere between 75 to 80% of the market. Old Dominion's number two in terms of revenue. FedEx is number one. And then when you just look at the LTL industry overall, Old Dominion, from what I can tell, just looks to be in a league of its own. So you look at the return on invested capital. It's nearly 30% well above. all of the competitors. They have an operating ratio of 72%. And competitors typically are all 80%

Starting point is 00:29:27 or more operating ratio. This really just helps show that their cost structure is superior to their competitors, which is obviously very important when you're looking at industry that's fairly commoditized. Then when we look at the weight per shipment, they lead the industry. They have over 260 service centers across the U.S. So that kind of creates that cost advantage and helps create this network effect as well. I should also mention they own their land rather than lease it, which we'll be talking a bit more about. And then they have near minimal debt, which gives them plenty of flexibility to continue to reinvest and then opportunistically buyback shares like they did in 2022. And then I like to see that their return on invested capital has been rising

Starting point is 00:30:07 over time. So in 2014, this is around 15%. And that metric's almost doubled in the past decade. Old Dominion, they're consistently stealing share from their competitors. I mentioned. and the market share numbers. And then I see the return on invested capital has been increasing over the years. And that really just tells me that they have some sort of competitive advantage that's allowing them to continue to earn supernormal profits that their competitors are able to replicate. And then one other quantitative piece I wanted to highlight here before I throw it back over to Kyle is they're operating leverage.

Starting point is 00:30:39 So this is another stat that just sort of blew my mind as well when looking at this company. So Old Dominion, they own the land that they built their service centers on. really helps them manage their cost structure over time. So to help illustrate the power and the importance of their operating leverage, we can look at their revenue and their earnings growth over time. So over the past decade, revenue has grown at 7.7% per year, pretty modest to moderate growth, nothing too crazy. But their net income has grown in an average rate of 16.6% per year. So over the past decade, their revenues have doubled, but their net income is up by nearly five times over the decade. So this essentially illustrates that as Old Dominion grows their revenues,

Starting point is 00:31:24 grows their business, steals share from competitors, their expenses aren't rising near as fast as their revenues. So they're able to keep more and more of that money that they're bringing in as they continue to grow. And this is also a part of why we've seen that return on invested capital figure just generally rise over time. That's right. And I'd like to actually just look a little bit more at that operating ratio that Clay mentioned because, I mean, when you look at the industry, it should really be studied because the amount of efficiencies that the industry has gotten over time is incredible. Like, when you go back in the book, they share their operating ratio from many, many years before they were public. And it would regularly be like in the mid-90s.

Starting point is 00:32:01 Now that that number is down to 70%. And like Clay also mentioned, the industry is around 80%. And so the industry has just, even though it's ridiculously competitive, it's just gotten more and more efficient over time. And it's been quite impressive just to see that. And I don't know how far old dominion can take it. But if you look at their operating ratio, it's still continuing to go down today, which is really impressive. I just think it really shows that the industry, even though it's in a boring industry, as Clay alluded to, it's consolidated significantly over time. And I think it's part of the reason is that just the companies with the lowest operating ratios are the ones that stay in business. And if you're running with a high operating ratio, these little economic shops have

Starting point is 00:32:39 really, really big impacts on you. And that's why I think you see. some of these smaller or other competitors just unfortunately leave the arena. So I want to kind of cover here more about Old Dominion's competitive advantages. So we can really just optimize our understanding of whether they can continue separating themselves from competitors and needing up more market share, which I think they've been doing a very good job of now for multiple decades. I think Old Dominion really has multiple modes. Some of them, granted, are going to be stronger than others. But let's jump into a couple of the reasons why this business, I think, has been gobbling up market share in the L-Tale logistics industry. So there's three kind of primary modes that I want

Starting point is 00:33:15 to go over that I think they have some of the attributes. So the first one here I want to go over is processing power. So processing power was outlined in Hamilton, Helmer's excellent book, Seven Powers and is I think one of the rarest competitive advantages out there. I got a chance to actually ask Hamilton, do you have any other good examples of processing power in businesses? And he actually said no, he wasn't able to come up with one. So I want to preface that by saying he might disagree with me here. But let me just tell you what processing power is and then you can think for yourself about whether they have processing power or not. So processing power is essentially when a business offers a lower cost and or a superior product due to its internal processes that can only

Starting point is 00:33:50 be matched by an extended time commitment by competitors. So when looking at other businesses, I basically never attribute a business to having processing power just because I think it is really, really rare. But I really do think that ODFL does have some processing power because part of the reason the business is so good is just all these little processes that they've now created over decades, right? And so if you're going to look at a new competitor coming into the market today, they don't have that decades of experience. Maybe they can hire out people that have decades of experience. I don't know, but I just don't think that they would necessarily be able to replicate a lot of the processes here. So I'm not going to say it's as strong as Toyota, which is the example

Starting point is 00:34:27 that Hamilton gives them that book. But I do think that they have some attributes of processing power. So just a couple of interesting factual evidence that would point me towards this is, you know, if you look today, 70% of their shipments arrive within two days, which I think is industry leading. Their on-time service is improved from 94% in 2002 to 99% this year. So, I mean, that's incredible increases in process. Then when you look at their cargo claims ratio, which is damaged goods, that's declined from 1.5% in 2002 to only 0.1% in 2023. And then the part that Clay mentioned about the business, they've tried to keep their employees as happy as possible, because obviously they've had these not so nice experience with unions, as Clay alluded to. And

Starting point is 00:35:07 unions have been a big pain for the industry over a long period of time. So I really think that their process for making sure that their employees stay happy and don't want to unionize over a very long period of time has been a huge bonus for the business that is very hard to replicate. And then so the next competitive advantage I think they have has to do with economies of scale. So the simple definition for this is just a business where the unit costs decline as volume increases. So Costco is the simplest example here as the business increases in size. They can secure prices for their goods at cheaper and cheaper price. prices. So as Clay also pointed out here, you know, Old Dominion isn't actually cheaper than

Starting point is 00:35:42 its competitors. If you look at the prices from what I've heard, it's actually more expensive than some of their competitors. So even though they do have, I think, some of these economies of scale, it's different than Costco. Costco passes along all these savings to their customers, whereas Old Dominion, I'm not saying they take all the profits for themselves, but I think instead of making their product cheaper, they make their product better and far superior to their competitors. And that's why people stick with them over a long period of time. But I do think that, you know, this scale advantage allows them to make this product better. And I think, you know, if the company was smaller, if the density of their network was wasn't as good as it is now,

Starting point is 00:36:15 it just wouldn't be the same business. If you look at some of the reasons that this company scaled up, a lot of it has to do with their service centers. So as Clay's pointed out, they have about 260 service centers all across the country. And because they have so many of them, it just allows them to service a much larger geographical area than its competitors. So if you look back in their history, they started just in Virginia. That's it. And then they want to expand. And obviously they had to expand outside of Virginia. Now they're all over the United States and like Clay said, parts of Canada and Mexico as well. So this service center has multiple advantages on both a regional and national level. So on regional levels, it just allows the

Starting point is 00:36:51 density of the routes to be closer to each other. It's just easier to move things from one point to another. It's cheaper. It's more efficient. You can make sure the trucks are full rather than partially empty, which I'll be going over more. And then, you know, on a national advantage, same thing, better route density, but then, like I already alluded to, their service times are a lot lower and continue to decrease, which obviously customers are going to like, they want their stuff on time. And then their claims are lower. So that obviously causes less disruptions as well for their customers. And then just another interesting point here that I found about scale is that back in 2010, one of their management said that due to their size and their increasing scale, they were able

Starting point is 00:37:25 to actually increase their negotiation power for diesel prices and gas. So obviously that's something you're not going to be able to replicate if you have, you know, a fraction of the amount of vehicles that Old Dominion has. The last one here that I want to talk about is corner resources. So a corner resources is when a company such as Old Dominion Freight Line basically has preferential access to a coveted resources that independently enhanced value. So the important part there is independently enhanced value. And the reason is, let's say a competitor for some reason was able to buy Old Dominion Freight Line's business, then now they would have access to all of Old Dominion's network of service centers.

Starting point is 00:38:00 obviously it would probably make their business a lot better too, but they don't have access to it because Old Dominion's not for sale at this point in time. So I think that their service centers, where they have them located, is really hard to compete with. And like Clay also said already, they own a lot of these locations. So they don't have to worry about getting kicked out or their leases going up. They own this land. And also another interesting point is these service centers, there's tons of pictures of them. They're not horrible to look at. But if you were living across the street from one of them, you probably don't want to see that. So, you know, competitors moving into some of these. these more denser populated locations, it's going to be harder just to build it because you're going to

Starting point is 00:38:34 need to get the community on board and the fact that they already have these laid out, I think is a really big competitive advantage. And then I just want to talk a little bit about LTL economics. They're different than the truckload. So with LTL, a lot of times what that means is your truck isn't going to be full because, you know, sometimes you have a customer who just wants, maybe they just want a small shipment. Maybe they want, you know, one crate. But the problem is one truck can obviously carry multiple crates, right? So you're either going to have to charge them a whole bunch of money because they're going to have to pay for the whole truck, even though, you know, maybe 95% of is empty. So that's where LTL comes in, where they can basically load up the truck

Starting point is 00:39:08 with multiple crates from their customers and then they have their own system for delivering it and making sure that the trucks are optimized at, you know, a very, very high utilization rate, which just isn't really, you're not able to do that in just full truck load. And then the other thing that's interesting, too, is that obviously if you have one truck carrying multiple goods from different customers, you have to have all these different relationships and trust with all your customers, right? Because if you say, oh, I can't make it on time because we were dropping off your competitors, stuff or whatever, they're obviously not going to enjoy that. So I think this trust that they built over this long period of time is really powerful as well. And then just lastly here,

Starting point is 00:39:42 just looking at the service centers, one interesting point that I found was that their service centers are just the way they lay them out is really interesting. So they actually talk a lot about how many service doors they have. So if you have a service center, which is where these trucks come and drop their stuff off for sorting, there's an interesting thought experiment that I thought about, you know, if you have one door in that service center versus 50 doors, which is going to be more efficient, it's going to be that 50 door one because you're going to be able to accept way more freight and you're going to be able to sort it a lot more efficiently. So that's why they have these really big service centers. And then another interesting point here is that a lot of their service centers

Starting point is 00:40:14 actually have 25 to 30 percent latent door activity. So that basically means that they keep these open in case their capacity goes up, which I think is really, really cool because it just shows that they really care about service because if something were to happen where maybe one service center gets hit with a lot of packages. If they were running at 100%, then there's a chance that maybe they're going to have delays. So they run with this latency specifically so that they can increase their capacity if needed. And the interesting thing about that is obviously if they were running at 100% capacity, that would probably mean that their margins and stuff would be better, but they want to make sure that they're getting the optimal service to their customers. These are the three primary

Starting point is 00:40:49 competitive advantages, I think that O'DFL has. And while none is, I think, super obvious. I think that's part of the reason why this business has had such good returns and why it's remained somewhat misunderstood. And despite being somewhat misunderstood, the returns have been really good. I mean, to have 25% compounded annual growth in the share price of the last decade and then their net incomes been increasing in the high teens now for the last decade as well, which is, I think, a really good proxy for intrinsic value. So I just wanted to finish this section off with just kind of talking about how this business kind of feels like the type of business that Buffett would really, really love. But I was thinking about it. I'm like, okay, well, Buffett already owns Burlington.

Starting point is 00:41:24 to Northern Santa Fe Railroads and obviously he understands logistics at a really high rate. So what are the differences between a railroad, for instance, in a trucking company? And I think that's the key because when you think about it, railroads probably are still better, right? Because yes, okay, Old Dominion has all these competitive advantages. It's been an excellent investment. I'm sure if Buffett knew what was going to happen, he'd probably love it. But the fact is, is if you had a lot of money or if you had a little money, you can literally just build, make a truck and just ship things from point A to point B. When you're talking about Burlington, to Northern Santa Fe Railroad, you can't literally just build out a whole network of railroads.

Starting point is 00:41:56 You physically can't, and there's all those regulations. So I think that's why Buffett probably would prefer a railroad over the business of a trucking industry. So that I just thought was an interesting thing to think about. Yeah, I also read up on an article related to the economy as a scale piece where there might be a city where Old Dominion has like three service centers. And if you compare the economics of having three to having just say one, that's really, a lot of what can make up for the difference in the returns or what their margins ended up being because just how far the trucks end up having to go. And logistically, it just helps them in terms of scale. And then another comment related to owning the land that'll piggyback on, it gives them a lot

Starting point is 00:42:39 of flexibility because whenever they see the opportunity to expand these service centers, they can just do it. They can just add on or add new, add more doors. Whereas if you're leasing, you likely don't have near the flexibility that Old Dominion has. I was also going to mention the latency you mentioned. So I had read that usually the excess capacity is anywhere between 20 to 30%. They prefer to be in the 20 to 25% range. And currently, it's actually at 30%. So it sort of shows kind of where the industry is at today. On the one hand, you could say they're sort of in a down cycle in terms of the trucking industry. And the other hand, maybe they're foreseeing future growth. I think this really enables them to continue to deliver that exceptional service and always be prepared to deliver that

Starting point is 00:43:21 service whenever their customers are needing it. And I guess I'll also continue on with the cyclical piece of the business. So whenever the economy slows down, you tend to see a pullback in the trucking industry. Occasionally, they have years where revenues decline. So that happened in 2009, 2020, and 2023. And the growth isn't going to be linear for a business like this. It's a bit choppy. And many investors probably see this as a bad thing, but in some ways this could actually turn out to be a positive for investors that are interested in investing in Old Dominion. I think the reasoning would be that the market tends to value certainty over uncertainty. So even if two businesses are growing at similar rates, sometimes uncertainty can keep a lot of investors out of a business like

Starting point is 00:44:04 Old Dominion and that short-term uncertainty, yeah, can kind of spook them a bit. But the business over the long term has consistently been a really strong performer. And like I mentioned earlier, The trucking industry is just absolutely brutal. And time and time again, there are companies being sold off or going bankrupt. And Old Dominion has really positioned themselves to benefit from this. Occasionally, they buy up competitors at a price that makes sense. Or oftentimes if they don't buy the competitor, they just benefit through increased market share of those customers now going to Old Dominion. And Old Dominion is also feeling that slowdown in the broader economy today. They actually released earnings the day before we're recording here on July 25th.

Starting point is 00:44:43 and they actually posted pretty solid results. But when we look at the past 20 years, revenue growth is average just over 11%. 20203, we saw revenue declines, and that's bounced back here in 2024. And they've seen an uptick and activity due to one of their competitors going bankrupt. That was a company called Yellow Corp. They shut down their operations. And obviously, the whole industry has felt weakness, especially in 2023. And when looking at the competitive environment today. There was that bankruptcy, the Yellow Corp. They were mismanaged and they ended up going bankrupt in August of 2023. And this is a pretty big deal because they were the third largest LTL player in the space. They were around for nearly 100 years. Again, shows how brutal this

Starting point is 00:45:26 industry can be. Other players in the space ultimately ended up bidding and getting the assets. I think Old Dominion was interested. Just the prices didn't make sense for them, which has been an issue over the past decade. They haven't done any acquisitions to my knowledge. But I think this also helps Old Dominion, as I mentioned, more customers, I think, are going to put more of an emphasis on who they're working with in the trucking industry, and some are putting more focus on things like quality of the business. And when I look at the competitors, I had mentioned earlier, the top 10 composed of around three-fourths in the market. And then I've ran into a chart that showed the market share of each company over time. And it's a pretty stable industry.

Starting point is 00:46:03 I think a lot of these customers stick with who they've been working with for a good period of time. The number one player is FedEx. Number three is XPO logistics. Both are publicly traded companies. And XPO is actually in the works of divesting its European business to become a pure LTL carrier in the U.S. And they purchase some of the assets in the Yellow Corp bankruptcy. And then the operating ratio, I mentioned earlier that Old Dominion's ahead of the pack in terms of this. When we look at FedEx, their operating ratio is 80%. They're the number one player. And Old Dominion, again, is currently at around 72%. And if I were to ask myself why that is, I would say part of it is because Old Dominion is just a more efficient operator. They've invested in technology. They've got

Starting point is 00:46:45 the logistics figured out. But I think the other part of the equation is just pricing. If they're able to charge higher prices and operate at a similar cost level, then they're going to have a better operating ratio. So I also wanted to mention a stat I saw in the investor presentation. And it showed a number of different competitors in the spaces, showed six of them that were publicly traded. And then it listed the number of service centers for each competitor and then the total shipments per day. And one of the stats that sort of amazed me is half of these players saw their shipments per day decline over that 10 year period.

Starting point is 00:47:16 And then Old Dominion, their number of shipments, it increased by 75% far above any of their competitors. And it just sort of points to how far ahead of they pack they are. There are some strong competitors that are Old Dominion definitely has to take seriously. But in terms of the metrics related to this business, I mean, it's just amazing. to me and how things have changed over this really long period of time. Yeah, that's such a good point, Clay. I mean, it's funny because we were talking with Chris the other day on the community.

Starting point is 00:47:44 He was talking about how Old Dominion Freight Line doesn't really seem like the type of business that would be interesting because, you know, it's just, it's in this competitive industry. But you see numbers like this and it's quite clear that Old Dominion has some advantage. There's no reason why they're going to be increasing their shipping volume at these rates for the competitors are dwindling, right? So hopefully some of the competitive advantages that I went over are the reasons that they're taking this market share and continuing to outperform. So I wanted to move on here and kind of look at comparing Old Dominion here to another business that might not necessarily be so obvious to our listeners. So obviously Old Dominion is in the shipping industry.

Starting point is 00:48:21 And as we pointed out, they're different than their competitors. They just seem to have some special sauce. So one strategy, sorry, I like doing that Clay and I have spoken about on path is comparing one business to another business that might not even be in the same. same industry. And so we're going to do the same thing here. So for both of us, we kind of came up with the fact that Copart is a really, really good comparable for this business. And there's kind of three primary reasons for this. So the first reason here, I think, is just the family history and culture of each business. So you look at Copart, Willis Johnson co-founded that business in 1972, and he was a CEO of it until 2010. So, you know, very, very long levels of tenure there. And it was his baby. And he

Starting point is 00:48:58 held on to a lot of his shares and, you know, he's enjoying retirement now. And then his son-in-law, Jay Adair, who married his daughter, he started in the business at the age of 19. He had a stint to CEO and now he's a chairman of the board. He's at a relatively young age of 55 and, you know, he's still involved in the business, but, you know, they have this longevity as well. And then Copart has this long history of culture that exists that is kind of out there to really best serve its customers and I'll be going over what some of those reasons are. Another thing is Copart really cares about their employees. They have this employee stock option plan that really helps try to keep the employees aligned with shareholders, which I think has really been a huge driver

Starting point is 00:49:33 of shareholder value for a copart. And then just kind of comparing that with Old Dominion, there's now three generations of Congdon's. And who knows, maybe there's some other Congdon's in there that are even on the fourth generation we don't know about. I didn't really come over anything, but you know, you never know. And then, you know, just looking at kind of the cultural part there, Old Dominion has multiple instances of people working there their entire lives and they like working there. Maybe they, I remember seeing, I think, a video of an employee saying that I could work somewhere else and probably maybe get paid a little bit more, but I really just like the family feel of Old Dominion, and I feel that they treat their employees really, really well. And then Old Dominion also

Starting point is 00:50:05 has a profit sharing program. So obviously they're trying to incentivize their employees to continue creating profits for Old Dominion. So there's just an interesting point here as well that Chris Mayer said in his research. So he said, two salesmen I spoke with a few years back had their entire 401k's in Old Dominion stock and conveyed that Old Dominion stock is widely held among rank and file employees. Old Dominion shares comprise over 20% of employees 401k assets. A significant portion of service center managers' quarterly bonuses are directly tied to profitability and service levels. Old Dominion employee turnover at 10% is the lowest I've come across in the industry and

Starting point is 00:50:42 the labor force, unlike most of LTL peers, is union free. So now I just want to move on to the second reason here, which I think, you know, I already talked about cornered resources. So I think both Copart and Old Dominion have this corner resource mode. So one thing I kind of already talked about is that, you know, NIMBY, not in my backyard effect, where it's hard to build certain things where people live in dense residential areas because people don't want to go out of their house that they spent a lot of money on and look at something that maybe might be unseemly to the eye. So in Copart's case, it's junkyards. I think it's probably even worse than Old Dominion. No one wants to look at a junkyard, right?

Starting point is 00:51:17 But the thing is, is Copart's been around now since 1972 and they own all their land. And so maybe, yes, residential areas have built up around where they are, but there's not really anything you can do. They own this land. So for a competitor, you know, if you were a competitor of Copart and you want to just set up shop right next to a Copart place, you can't do it. So yeah, so this basically means Copart's network is just better. And because that network is better and because they can't have competitors kind of infringing

Starting point is 00:51:43 on their land, they save on things like logistics. Their ability to ship parts from one place to another is going to be shorter distance than their competitors are going to be able to do. and they can pass those savings on to their customers. So Old Dominion has kind of a similar mode. I mean, they have their growing number of service centers that are very strategically located in certain areas. And as this service center network grows and gets larger and larger,

Starting point is 00:52:05 it just improves their products more and more over time. And also, not only does it improve service, but it improves the economics of the business. I think that's part of the reason why we're seeing their operating ratio come down and their return on investment capital go up. It's just the economics of the business just continue to get better. And I think a big reason for that is this expansion in their service centers. The final reason I think that these two businesses are similar is their willingness to improve the businesses using technological innovation and boring industries, right?

Starting point is 00:52:32 So one of Copart's really big advantages was it was one of the first businesses in the industry to use computers. And the reason was very similar. ODFL did the same thing, which is just to decrease the cost of paper by digitizing their records. So I think in junk to gold, Willis Johnson was saying that they had something like 8,000. pages of paper that they had to rummage through to get information and they just digitized it. And there you go. You get rid of 8,000 pieces of paper and you increase your ability to find information probably a lot quicker, right? And so there's going to be tons and tons of cost savings there. So now just looking at ODFL, I think I've done kind of a good job already of talking about some of the processes that David Congdon came up with. So one of the bigger ones that I didn't

Starting point is 00:53:11 discuss in too much detail was the dockyard management system. So it's quite simple. Basically, it was a barcode on each package that swiped when the shipment comes in. And then basically it would just tell the people, the dock workers working at the service centers where to put things. And it doesn't sound like a big deal, but obviously part of the reason why Old Dominion is so good is that they get their packages where they need to go in a very short period of time. And so this was one of their kind of first big things into using technology. And then they basically did the exact same model as Copart where they transitioned from paper to digital record keeping, which obviously has its own efficiencies.

Starting point is 00:53:47 Just there was an interesting thing I read in the book here. So Chip Overbay, who, in 2010 was the senior VP of marketing. He said that they were investing in technology at that time that might not actually show an impact today, but we'll have a big impact in five to 10 years. So I just think that was really interesting that they are continuing to look forward with their ability to use technology and whether or not it has an impact today, it doesn't matter as long as it's going to have an impact down the road. So I think both Old Dominion and Copart have a lot of similarities in the strengths of their businesses. And I think that's probably why both of them have had incredible advances in their stock prices over the last decade.

Starting point is 00:54:22 So I just wanted to also point out here that we recently had Chris Mayer on the TIP Mastermind community for a Q&A and he actually brought this up independently that both Old Dominion Freight Line and Copart have a lot of these similarities that I just discussed. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up and customers now expect proof of security just to do business. That's why VANTA is a game changer. VANTA automates your compliance process and brings compliance,

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Starting point is 00:57:56 All right. Back to the show. Yeah, I'm really glad you mentioned Copart there. Eagle Point Capital, they put together a ride-up that I thought was a really good one to highlight here. So the article is titled The Direction of the Mote and it discusses not only MOTs, but how modes change over time. So I think part of the reason someone like Nick Sleep was such a brilliant investor and just a brilliant for selecting Berkshire, Amazon, Costco for his portfolio, was because these businesses were designed in such a way that with the passage of time, their Motes would

Starting point is 00:58:28 only get stronger and stronger. It reminds me of the saying that time is a friend of a wonderful business and the enemy of a poor business. And Buffett has talked in previous Berkshire meetings about how he wants to find companies where their moats are widening each year. And note that he didn't say that he wants profits to increase each year. He cares much more about what's happening with the moat because that in turn will lead to the success or the failure of the business over the long term. Buffett wrote in his 1986 shareholder letter that the difference between GEICO's costs and those of its competitors is the kind of moat that protects a valuable and much sought-after business castle. No one understands this moat around the castle concept better than Bill Snyder, Chairman of Geico.

Starting point is 00:59:13 He continually widens the moat by driving down the cost still more, thereby defending and strengthening the economic franchise. So Buffett would compare the expense ratio of Geico to its competitors to gauge whether that moat is widening or narrowing. I think this is perfect because I think we can do the exact same thing for Old Dominion when we look at their operating ratio, which over time just keeps going lower. When you can find businesses with widening moats, it also, I think, really helps us hang on to it when things get tough, whether it's a slowdown in the economy or the stock market has a rough year. In the case of Old Dominion, for example, we know that the trucking industry isn't going to be going anywhere. So Eagle Point Capital, they made the claim that

Starting point is 00:59:55 Stocks with widening moats are really tricky to find, but they ended up using Old Dominion as an example. They wrote that Old Dominion operates a hard-to-replicate network of L-TL-L-Frait terminals, which allow it to offer better service than its rivals. Its higher returns on equity and higher profits allow it to invest more than its rivals, widening its moat. So that was one mental model I thought I'd share with the audience here with regards to whether a moat is widening or narrowing over time. So I look at Old Dominion, I see their return on capital increasing over time.

Starting point is 01:00:27 They've continued to expand their service networks. I think their modes getting stronger and stronger with the passage of time. And over the past 10 years, they commonly mention how much they've invested into their service network. So over the past decade, they've invested $2 billion. And they've clearly shown that they're able to achieve higher returns than their competitors on those types of investments. I wanted to touch on capital allocation here and then let Kyle cover the main.

Starting point is 01:00:53 management and the incentives, what he found on that front. In 2023, Old Dominion earned $1.5 billion in operating earnings. Roughly half of that is deployed into CAPEX. So their CAPX, it typically includes things like buying land, building new service centers, expanding their existing service centers, and then expanding their fleet as well as investing in new technology. So just on the technology front alone, they announced plans to invest $75 million on that front. And a lot of their competitors just aren't going to have the capital to invest that amount. And especially in something like technology that has a very long payoff, it's not like you're getting a big return in year one or year two like you referred to earlier from that comment from 2010. So with the

Starting point is 01:01:37 remainder of their cash flows, they generally are either repurchasing shares or paying out a relatively small dividend. And when I was reviewing the data on Finchat, one thing that really stuck out to me is their share repurchases significantly ramped up in 2022. And they're a little bit of the, and that's just not because they had more capital, because the share price got hammered. So, ideally, you want to see businesses that see opportunities and they're opportunistic on when those great opportunities come, especially when you can deploy capital at really high rates of return. So typically, I think when you look at a lot of companies today, when it comes to share buybacks, they're just buying back shares every year. They aren't really looking at the share

Starting point is 01:02:16 price. And when I see a company like Old Dominion more than double their share repurchase program when the stock price goes down significantly. I don't know if it went down 30, 40%, something like that from the high. That just really tells me that they understand capital allocation really well, and that's what I want as a shareholder and a great business. You want great capital allocators running the company and finding where they can best put that capital to work. So when I look at growth opportunities and how the company's going to continue to grow in the future, I would say the first thing is I think they're going to continue to see increased market share growth. So essentially stealing share from competitors. So management expects continued consolidation in the industry,

Starting point is 01:02:57 whether that be weaker players shutting down or weaker players just losing business to the stronger players that offer better service. In their annual report, they stated, I quote, we believe consolidation in our industry will continue due to increased customer demand for transportation providers that can offer both regional and national service as well as other complementary value-added services. So another critical piece I wanted to mention here is Old Dominion is, a non-union player. They showed this great chart in their investor presentation that showed essentially how non-union players have continued to steal share from the union players. And it makes sense if Old Dominion is a better place to work, they provide a better quality service. It's sort of a

Starting point is 01:03:36 byproduct of being a non-union player, generally attracting some of that business in the industry. And they also broke down each region in the U.S. and showed that in every single region, they're continuing to gain share over time, which is also, you know, it's not just one region that's just sort of dominating. They're very well diversified and have shown the strength of their business across the whole country. So the LTL market overall, it's growing at around 5%. It's grown at that rate over the past 20 years. So that helps generate some organic growth just through higher volumes. And then one key part, Shri Viswanathan actually mentioned to me is that e-commerce is becoming a really important part of this business and it's helped driving some of that growth. So e-commerce relies on

Starting point is 01:04:19 LTL shipping, and it's growing much faster than traditional retail segments. And then they've also shown some pricing power as well. So generally, Old Dominion's increasing prices in the 4 to 5% range each year. And when I was chatting with Sri, he actually owns Old Dominion in his fund. And I was asking him about their growth prospects. And he agreed that much of their growth is going to come from market share gains as well as new investments in service centers. He also mentioned and talked about how there's a lot of inefficiencies in the truckload industry, it's been a constant problem for them. I think it's not as good working conditions. A lot of these truckers in the truckload industry are traveling like great distances, whereas it's much matter working conditions in the LTL industry and

Starting point is 01:05:01 there's not as much driver turnover and such. There's high touch points. And then he also highlighted some of the cultural aspects for Old Dominion. They treat their employees well. They have a really good driver training program. And when the industry has a drawdown, they aren't letting their drivers go. Usually they're finding somewhere within the business for them to go, whether it's at the service centers or whatnot. And then there's not much to comment on the balance sheet. It's a really good balance sheet. They're able to make these sort of sacrifices. For example, in 2022, when the share price is down, they have the cash to redeploy it when that opportunity arises. And that helps differentiate them over the long term as well. Yeah, Clay, so I really

Starting point is 01:05:39 likes your point there about the widening moat. And I think that's also another similarity between Old Dominion and Copart. They both, I think, have widening modes there that are just continuing to get wider and wider over a period of time. So I wanted to move this conversation and talk a little bit more about management as well here. So the current CEO is Kevin Freeman. And he took over a CEO in 2023. So he hasn't been CEO for a very long period of time. But as I mentioned earlier, he's been with Old Dominion for a long time. And he's not some sort of hired gun who's just coming in here to make a quick buck. So Old Dominion has always been led from within, which I think is great and I think it really shows you that even if you are with the company, you have this ability

Starting point is 01:06:18 to move up as well. So Kevin Freeman has had multiple roles with Old Dominion since he started working with them back in 1992. I looked at his profile on O'DFL's website and, you know, he's been focused on a couple different areas such as developing operational and sales plans, leadership in the LTL industry, customer relations and business strategy. So, you know, he's had a pretty wide range of duties with Old Dominion throughout the years. Since he's a newer executive, it's definitely a little bit harder to evaluate what he's done with the business in such a short time. And then also, like Clay also alluded to, I think the LTL industry right now is going through a bit of a lull period. So you can't expect him to crush it right now. It's probably, you know, it's going to need to

Starting point is 01:06:57 probably go through a full cycle, I think, is to give him a more fair assessment. So we'll see how that goes over a period of time. But given the tenure, he's been with Hold Dominion, I feel he probably has a very good idea of how the business works and probably how he can continue growing it. So my assumption is he's going to be a good fit for the job, but I mean, only time is going to be able to tell us how he does. I wanted to move here and look at compensation packages here for not only the CEO, but other named executive officers in the business. So the CEO has a salary of $784,000, which you could make the argument seems high, but if you look at some of their competitors, I looked at XPO and SIA, and they're pretty similar. They're both the CEOs of those

Starting point is 01:07:38 businesses are making a little bit more, but it's not much more. It's still, you know, less than a million but very high six figures. And then just all the other named executives on their C-suite team are making between $5 to $600,000. They have a couple primary award plans to help incentivize their managers to grow the business. And so, you know, they give stock awards and non-equity incentive plan compensation, which these two areas actually make up the bulk of the overall compensation. So even though I said his salary, what he's actually making in terms of his total compensation

Starting point is 01:08:09 is actually much higher. Let's look at stock awards first. These are just, you know, restricted stock awards. These are tied to operating ratios. So management basically must maintain or meet the minimum thresholds in operating ratios. These are eligible for up to 150 percent base salary as these restricted share awards. So, you know, as long as their operating ratio is staying, I think, in their threshold area there, then they're eligible to receive these. And they've been doing a very good job of getting these. Basically, I looked at over the past three years at their proxy. And it showed that they all were given this. require this award. So they've clearly been meeting those restrictions that they need in order to get that bonus. If you look at their operating ratio in 2020, it was 77.4%. And in 2022, that's dropped to 70.6%. So they're doing a good job on that end. The next portion of their award system is this non-equity incentive plan, which is basically a cash incentive that's paid out on a monthly basis. That's kind of a pool based on pre-tax income as a percentage of revenue. So factors that basically affect this area are pre-tax income, annual pre-tax income growth and operating ratio. So essentially the threshold that

Starting point is 01:09:16 they have to pass is 2%. So if, let's say, revenue is $100 billion, this isn't, I'm just using simple numbers. Let's say revenue is $100 billion. They have to have $2 billion of pre-tax income in order for them to back access this award. So this just kind of does a good job of keeping their operation ratio where it needs to be. And then obviously, if that pre-tax income continues to grow in size, also that also incentivizes them. So it's a decent system they have here. And then each executive gets a participation factor. So it ranges between 0.18 to 0.6 and that's a percent. So basically, they have this big bundle of operating income and then the executives get a percentage of that. And they can make up to 10 times their base salary. So it ends up being quite a bit. I think the CEO last

Starting point is 01:09:56 year made about $9 million in overall compensation. Then when we look at insider ownership, according to the 2024 proxy statement, insiders, which include executive officers and board members own about 9.9% of the business. So it's pretty good. It's not insanely high, but I'm happy with that. I think that that's a pretty good alignment. The CEO, Kevin Freeman, we obviously should probably take a look at his shareholdings as well because he's now leading the business. So he owns about 64,000 shares. Market value that I looked at as of a couple days ago was about $12.5 million. So I wanted to take a look at, okay, well, obviously that's not a giant number. But if we can find a management where the bulk of their money is invested in the shares of the business, I still think

Starting point is 01:10:35 that that does a pretty good job of aligning. the values of both management shareholders. So it was kind of hard to find his net worth according to a website called Venzinga. Almost his entire net worth. Liquid net worth is in Old Dominion Freightline shares. So obviously that's great to hear. That means that he's hopefully well aligned with owners of their shares. Even though Kevin Freeman's ownership isn't very high,

Starting point is 01:10:55 he's been building this since he's been kind of in that upper management level. And he's been building it up over quite a long period of time. So it's nice to see that he's building his position, letting it grow rather than just selling off options for a profit. month. So my overall thoughts on management and incentives is that it's hard to assess Kevin Freeman. You know, he's only been the CEO for a year now. I think he was dealt a pretty good hand as, you know, Old Dominion is already a pretty good business. Obviously, he's coming here in a downturn. So like I already said earlier, I think you need to wait for kind of a full cycle. And I think

Starting point is 01:11:25 especially with a business like Old Dominion, you got to wait for, you know, a down cycle and up cycle and probably back to a down cycle to really get an idea of how good his management is going to be. Let's look at former management just kind of from an overall business perspective here. So Greg Gant was a CEO here from 2018 to 2023. So as I've gone over here before, I really like Buffett's rule of one where you basically look at the amount of money that was retained by the business and reinvested and then see how much market cap value the business did over that time. So if we look at the time period of 2018 to 2023 when Greg Gant was CEO, they retained

Starting point is 01:11:58 $1.3 billion in retained earnings while he was a CEO. And over that time, the market cap has gone from $12 billion to $36 billion, an increase of $24 billion dollars. So according to Buffett's rule of one, which is you want to create at least one dollar market value for each dollar retained, he's obviously did an incredible job. So I didn't get a chance to investigate too much while I retired. I think he fully retired of the business. So I guess that's why he left. But he clearly was doing a really, really good job before he left. There was one kind of, I guess you could call it a yellow flag here that I found when looking at their proxy here. And this was actually so the former CEO, he was awarded $5.7 million in restricted stock awards when no other

Starting point is 01:12:36 named executive was making more than $1.1 million from that bonus. So I talked briefly with Shri about this and he said that he retired. I think they wanted to give him this farewell gift. And instead of having it vests over multiple years, they just gave it to them all at once. But I just thought that's worth bringing up here. And then the other kind of red flag here that Shri also brought up was that their pre-tax income has gone down, I think, between 2023 and 2024. And overall compensation has actually gone up. So you kind of have to figure that out for for yourself if you think that's right or not. I mean, I prefer to see that compensation probably go down if the fundamentals of the business are not as good as normal. So you got to make

Starting point is 01:13:14 that decision for yourself. So my overall thoughts or management seems quite good, competent. Again, hard to assess Kevin Freeman. I don't think he's been a detractor from the business at this point. I mean, they're clearly still doing well. Compensation package, not the best I've seen. Yeah. And then the other point here I wanted to point out is a lot of the compensation is based around operating ratios. So I think that's why they talk about it a lot. It seems like it's, probably smart that it is based around that because as Clay already pointed out, you know, their revenue doesn't grow very fast. It's growing mid to high single digits, but their profits are growing at mid-teens. So I think that they've been doing a pretty good job of incentivizing their

Starting point is 01:13:50 management to do kind of the right thing and continue growing the business. It would be nice to obviously see kind of a denominator in their number to see, you know, obviously they're deploying money. They're not really on a wire, as Clay said, he didn't see anything of the last 10 years major and I didn't come across anything. So I don't know if maybe having a denominator and doing capital efficiency for their compensation makes as much sense as a serial acquirer. But it's nice to know, right? Because you want to know that the business is continuing to invest money in itself and wanting to earn a really good profit over the long term. But I would say overall, I'm kind of lukewarm on their compensation package. It's not the best I've seen, but it's not the worst. Yeah, thank you for your comments

Starting point is 01:14:28 on management compensation incentives, all super helpful. There's a lot to look at in terms of management and incentives, so it's nice to get someone else's take on that. I wanted to jump here to cover valuation. So one of the reasons I wanted to cover Old Dominion on the show is because the stock dropped, and I thought the valuation was getting to an interesting level. I mentioned it to our mastermind community in mid-June. The stock was trading at 170. They reported earnings yesterday, and the stock just jumped over $200, so not quite as interesting as it was, and that's one of the troubles with researching stocks. it takes time to really get to know a business. It's nice to sort of have companies that you look at, you put it on a watch list and sort of wait for those opportunities. So I'll share my thoughts on

Starting point is 01:15:11 evaluation and you can tweak the assumptions however you'd like and make your own assessment of the business. So one of the great things, though, even with the stock price increasing, is that high quality businesses, their intrinsic values tend to continue to increase over time, especially over multiple a year periods. And the stock, because of that, generally just also continues to hit new highs. So that's what we've historically seen with Old Dominion, their intrinsic value continuing to go up and then the stock price continuing to hit new highs. I had talked earlier about the capital allocation for Old Dominion in 2024. They plan to reinvest roughly half their cash flows. And that's really good to see with a company with a return on invested capital of

Starting point is 01:15:50 25 to 30%. So when we look at the multiple, I tend to look at the enterprise value over the EBIT, which is earnings before interest and taxes instead of the PE. I feel like it paints a little bit more accurate of a picture for the company's earnings and operations. So that multiple today is roughly around 25. This is roughly the same multiple as the S&P 500, but I would argue that Old Dominion is a higher quality company than your average company in the S&B 500. I thought the best way to share my thoughts on valuation here would be to look at what John Huber shared on the show when considering what really drives the return of a stock. So he shared what he calls the three sources of shareholder returns. The first is earnings growth. The second is the change in your multiple,

Starting point is 01:16:37 and then the third is your capital returns, which is either share re purchases or dividends. So when I apply this framework to Old Dominion, I think earnings growth of 10% is quite reasonable over a business cycle at least. So the business has some cyclicality to it. So it's important to remember that the results from year to year are going to bounce around. So some years it might be zero. Some years it might be 20%. Over time, I think 10% is quite reasonable. And then you may see a bit of multiple contraction, but I wouldn't say today's price is egregious by any means. And then if we look at capital returns, I would say that the dividends and share repurchases are going to bump up your returns as a shareholder by anywhere 2 to 3% range, maybe more if they're able to opportunistically

Starting point is 01:17:20 buy back a lot of shares. And then when we add all of these together, I get, an expected return anywhere in the low to mid-teens. One of the things I also find interesting about Old Dominion is I think the long-term risk is relatively low. The business is quite solid. The competitive position is really strong and you don't have to worry about excessive debt or them going under during a recession or going bankrupt like some of the competitors. I would keep an eye on the execution of their growth if they're continuing to expand the number

Starting point is 01:17:49 of their service centers. It's something they've done well for multiple decades. so I wouldn't see that as a huge concern. Chris Mayer joined the Q&A for the mastermind community, as you mentioned earlier, and someone asked him, what are some of the risks around Old Dominion? And he mentioned they'll need to keep the culture in place.

Starting point is 01:18:06 He definitely sees that as one of their competitive advantages is the strong culture, family culture they have, which is something that's really hard to measure. That's the problem, right? It's something that's not going to go away overnight, and it's something that would slowly degrade over time. I thought that was worth mentioning. And then the other risk that Chris mentioned is that if the company were to become unionized.

Starting point is 01:18:28 So that's another part of the cultural aspect of the business and ensuring that, yeah, they aren't having to deal with all these unions. Chris also mentioned the external forces. So over the years, Old Dominion has really feasted on weaker competitors. And now I think they're facing some stiffer competition, are taking it much more seriously. So XPO and SIA and then FedEx is actually looking. to spin out their LTL division as well. So these bigger competitors are also benefiting from consolidation within the industry.

Starting point is 01:19:00 And Old Dominion's growth might not be as good over the next decade as it was in the previous, but I think they're still pretty well positioned. So I'll give you a chance to comment on valuation if you'd like. Yeah, so Clay, I think you really nailed it there, that the risks are relatively low with a business like this. I mean, you know, outside of what you were just talking about, you know, if you just think about the younger generation, you know, I don't think people are going to be going to Harvard and then wanting to disrupt the trucking industry. Maybe I'm wrong. Maybe it'll happen,

Starting point is 01:19:26 but it just seems like if you were to give someone a couple billion dollars to compete with Old Dominion freight line, I still think it would be very, very, very difficult. Who knows what will happen in the future? I mean, capitalism's brutal. The industry is brutal, but it seems like right now they seem to be in a pretty safe place, at least for a short period of time, especially given the fact that they have such a nice balance sheet as well. As for the evaluation point you just made there, I don't really have many gripes with your assumptions. I think they seem very, very, reasonable and maybe maybe a bit conservative. It's also worth noting that as their operating ratio decreases, their margins are going to continue going up, which it seems like they're continuing to do

Starting point is 01:20:01 now. So there may be a chance that management can eke out some extra percentage points on their profits over time. But I think that 10% number sounds pretty good. And then I saw there that you liked using EV to eBay ratio, which I think is a very smart move. So I used Finchat to look at the range that they've had over the last decade. And it's been between nine out of low and 33 at a high. So I agree with you that I'm not going to expect much multiple expansion here over the coming years as part of the valuation. If you think that growth is going to slow down, then you may actually want to bring that EB-to-Ebit ratio down as part of your valuation. Just, you know, maybe the market's going to start giving it a lower number, but that's kind of up to you. But I think given

Starting point is 01:20:41 the quality of the business, the base case for the EB-D-E bit being somewhere around the current number is probably pretty fair. And then lastly, you know, you talked about returns there for dividends and buybacks don't really have anything at. I think that that'll be a pretty good contributor. If they have more and more cash can really hammer away at buybacks, especially if the share price goes down, then you could see even better returns. So yeah, I agree with you. Low mid-teams seems very reasonable going into the future here. And like we mentioned plenty of times on the show, none of the stocks we discuss here are intended to be a buyer sell recommendation. We've just found that people really like these types of

Starting point is 01:21:15 discussions and hearing our thoughts on companies we find interesting. So please do your own research. Before we close out the episode, Kyle, I also wanted to talk a little bit about our TIP Mastermind community. Recently, we had some really fun calls. I like to mention a couple Q&As we had. We had one with John Huber, another one with Chris Mayer. Members definitely appreciated both of those. And we've had some members share some interesting stock ideas with the community too. So for those who aren't familiar, the TIP Mastermind community, it's a community that we put together that is tailored for portfolio managers, high net worth individuals, and entrepreneurs. We have just over 100 high quality members who are there to network with others, share stock

Starting point is 01:21:56 ideas, and get feedback on ideas as well. And then we also have two live events each year, one in Omaha and May, the other in New York City in October. And there's actually another meetup in London that Stig's hosting that I'll be mentioning here shortly. So it's really just fun to chat about some of these bigger names on the show that. are oftentimes more well-known and easier to cover in a podcast format, I think. I think we can find a lot of information on someone like Old Dominion. But I think some of the best investments are those in which nobody's talking about them. The community, thankfully, makes room for both of these, both the well-known names and maybe the lesser-known, maybe smaller companies,

Starting point is 01:22:35 because you can chat with all these members that are looking at companies you would even think to find or even look at. It's also much more difficult to talk about some of the things in a podcast format. Maybe it's too small. Maybe it's a little bit too niche for anyone to really care. For example, one member here in a couple weeks is going to be sharing his whole portfolio on a Zoom call with the whole group and just sharing everything he owns and some of the thesis behind some of his holdings. And that helps stimulate a lot of ideas with people and get people thinking about how they're managing their portfolios as well, especially when someone's so thoughtful is just sharing everything, sharing their thoughts on it all. And yeah, this member manages his portfolio full time. So he's

Starting point is 01:23:12 He's thought plenty about the 25 or so holdings he has. So one thing that makes me really excited about the community and sort of where it's heading is just some of the amazing members we've had joined the group. So recently we had one member from London who has extensive experience in the investment industry, just a great track record graduated from Oxford and really just knows investing inside and out and big fan of the show. Another recent member manages billions of dollars in the real estate sector and it's deeply passionate about value investing. And then since I own Constellation software in my portfolio,

Starting point is 01:23:46 I was happy to have one member join who was previously a portfolio CEO at Constellation. So it's just cool to have the opportunity of someone that sort of has an inside scoop on how the business runs, what their DNA is. So just some really interesting people we've been able to attract. But despite a lot of people having vastly different backgrounds, we all have this common thread of being value investors and being really interested in that. And the common debate in the group I've seen recently is sort of these high quality compounders trading at high valuations versus these cheaper companies trading at a P.E. 5 and buying back all their shares. I know you've been interested in one of these names and it's easy to fall into a crowd. But it's also cool. We have this community of people where

Starting point is 01:24:30 some people are at both camps, some people are in one camp, some people are in the other. And it's just fun to learn interesting viewpoints and perspectives and how people think about current. opportunities in the market. Yeah, I'm not sure if you have anything to follow up on that. Yeah, no, Clay, I completely agree. I mean, it really feels as the community's grown, we've really brought in people with a very wide range of skills and life experiences into the community. So, like you said, we have hedge fund managers. We got analysts from Wall Street firms and, you know, plenty of members who've successfully exited their businesses. And maybe they're just retired now, taking care of their own portfolio. And we have medical professionals and entrepreneurs. And it's

Starting point is 01:25:07 really cool just to see such a wide diversity of different expertise in different areas. And also the other thing that's cool is that, you know, if you want to learn about a specific industry, we have all these people who've been working in these industries for a long period time and they're always open to talk about it and help you and help educate you and help increase your circle of competence. So I really get a lot out of that part. And then, you know, one trait that I really admire about the community is just the continued focus on personal growth, right? I mean, obviously it is investing focus, but we're

Starting point is 01:25:33 there not only to get better investing, but to learn more about just the world around us and to make higher quality decisions and improve our decision making. So we talk a lot about all that kind of stuff as well. And you know, we're all in this investing game together and talking about maybe common issues that people have encountered and how we dealt with them. And it can be really, really helpful and therapeutic to share wins and losses with people who are like-minded. So yeah, I mean, the community's had a very positive impact for me just in terms of the quality of my thinking. And I really appreciate the community. And they say you're the product of the five people you spend the whole time with. And the community allows you to spend some time around some

Starting point is 01:26:07 really, really high quality people who can help you learn more. So, you know, like clay, I come from the quality camp of investing, but with the wide array of investors we have, we're finding that we really do get a whole slew of different ideas. Yes, there's tons of quality ideas, but, you know, we have a whole section on, you know, special situations, for instance, and we regularly get some interesting ideas there. And so lately, there's definitely been some interest here with cheaper business that have insanely high cashful yields that can sustain themselves for literally decades. So I've heavily been researching a play in the energy industry that I'm very, very excited about. And the cool thing about that is that there's other members in the group that are also researching the same business.

Starting point is 01:26:45 So we can kind of team up and do some very, very in-depth research and due diligence. Because we can team up and do the scuttleback together, you know, it allows your research process just get that much better. And so on the same business I referenced above, there's one member who's actually has a history as a lawyer. And so he's been scoured in the internet looking for a contract between that business on one of their customers just to get more insight. So that's just a cool little addition that I probably wouldn't have any access to without the community. So one additional format that we're using here for some of our group calls I'm really excited about is the bull bear position. So Stig and I actually got a chance to jump on a call and I got to be the bear for Evolution A.B,

Starting point is 01:27:22 which is a business that Clay and I covered on this segment before. And so the reason I just love this format is that I'm an Evolution A.B. Bull. I mean, it's one of my big positions here. But being a bear just really helps me focus my attention on maybe some of the things that I was missing and getting my brain out of that echo chamber of confirmation bias where you know, you're talking with all the other people who are also bulls and they're all just telling you the same thing that the company is good and, you know, X, Y, Z and these are things that you probably already know and maybe you enjoy hearing it from other people. But a lot of times it also just kind of acts as a handicap because you want to look at the other side. So I felt like this bull bear was so good because it got me really thinking about some of the potential downsides and maybe some of the things that I'm concerned about with the business. So I'm going to be doing another bull bear chat here with a community member in October on a very popular serial acquirer, and I'm very excited about that chat. Yeah, there's a lot of exciting things happening. So in relation to surrounding yourself sort of with like-minded people, I think one thing I wanted to mention that sort of stuck out to me is a number of members have aspirations to start their own fund or they recently just got into the industry themselves. Maybe they

Starting point is 01:28:27 sort of feel siloed in that they manage their fund and they're kind of a one-man shop. But They just really enjoy having that opportunity to surround themselves with people like them. And I think they also just find value in kind of walking along this journey of people that are going through the same struggles you have. Maybe they're a little bit further and they can help you with some of the things you're going through. So I think that is really helpful to a lot of members. And so Kyle alluded to the Bull Bear chat.

Starting point is 01:28:53 So I'll mention that we host a Zoom call at least once a week doing a ton of different things. So yesterday, Kyle and I hosted a social hour. We do stock presentations. Kyle is actually going to be presenting one of the stocks he added to his portfolio, which I absolutely can't wait for. And then we do things like the Q&A's with the podcast guests. And I'm going to look ahead here and just share a few of the things we're doing with the community. So just by happenstance, we're doing a member spotlight with that member from London. I mentioned it's happening a day after this episode is going to be released. So it's 10 a.m. Eastern on August 16th. So his investment returns have been quite impressive over the past decade. So I'm really looking forward to that. Stig is hosting an in-person lunch and dinner in London.

Starting point is 01:29:36 That's on Sunday, August 18th. We have a professional investor in the group who's pitching a stock on August 29th. We have another member spotlight with a professional investor on September 12th. A lot of these spotlights we do, they just kind of share their investing journey, their investing style, maybe some of their holdings, and then members can just ask them questions on the call. And then Shreiviswanathan, who's been a guest on the show, he'll be joining the group for a Q&A on September 18th. We're also going to be discussing Hermes, which we're going to be recording an episode on. And then Toby Carlisle, a fan favorite of TIP is also joining us in August. So we have a lot of exciting things coming up. And I also wanted to mention that we're looking to onboard five more

Starting point is 01:30:18 members within the next month. We're capping the group at 150. So if you're interested, I would encourage you to apply to join. We're pretty stringent on who we allow in the group because we want to keep the discussions really high quality, ensure we're chatting with good people on Zoom, meeting great people in person and whatnot. So to join our wait list, you can go to theinvestorspodcast.com slash mastermind. And then you'll hear from me shortly after regarding more details from the group after you enter your email there. And then you're also welcome to just shoot me an email at clay at the investorspodcast.com and I can send you everything you need to apply for the community. So with that, I think we'll close out the discussion there, Kyle.

Starting point is 01:30:57 As always, thanks so much for joining me and looking forward to what we find for next quarter. My pleasure. Thank you for listening to TIP. Make sure to follow We Study Billionaires on your favorite podcast app and never miss out on episodes. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only, before making any decision consult a professional. This show is copyrighted by the Investors Podcast Network. Written permission must be granted before syndication or rebroadcasting.

We Study Billionaires - The Investor’s Podcast Network - TIP652: Best Quality Idea Q3 2024 w/ Clay Finck & Kyle Grieve

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