Victory Capital Management Inc. — Sycamore Mid Cap Value Equity on Knight-Swift Transportation Holdings, Inc.
Thesis
Knight-Swift is benefiting from an improving freight cycle following one of the longest freight recessions on record. Truckload spot rates and contract pricing have tightened as carrier capacity has become more constrained. Enforcement of English-language proficiency requirements and resilient consumer demand are supporting pricing conditions. Lower oil prices also benefit the company's fuel-heavy cost structure.
“Shares benefitted from an improving freight cycle, as truckload spot rates and contract pricing tightened meaningfully after a multi-year downturn.”
Key risks
- A renewed downturn in freight pricing
- Higher oil prices