Anthony Speciale Stock Market Analyst

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How to Profit from the Missing Link in the Global Supply Chain

The global supply chain is a disaster right now. After shutting down huge portions of the global economy during the COVID pandemic, we have now tried to turn it back on to operate at full throttle. And ever since, manufacturers have been struggling to meet the extremely high demand.

This has really changed the way we’re going to do inventory management. Before, stuff would arrive from the factory where it was needed… when it was needed. But now, that’s changed, as companies are going to remember what happened during the pandemic.

We’re going to start seeing increased usage of local warehouse space, and that’s one of the things that makes investing in industrial real estate such an attractive proposition. We’ve talked about that before, but that’s not what I want to bring to your attention today.

Demand is so strong right now that when you look at the major US ports, ships can wait for 10 days at sea just to get to the port. And once they get to port, there’s also a severe shortage of trucks, drivers and containers to transport those goods to the factories.

The truck driver shortage is a serious problem, especially with the holiday shopping season coming up, and it’s creating an additional lag in the industry. But there’s certainly something we can do to capitalize on this issue.

We talked about USA Truck, Inc. (USAK) in a previous update, and today we’re looking to buy another trucking company in high demand. This is one of the best stories in the stock market today.

Daseke, Inc.

Daseke, Inc. (DSKE) is a flatbed and specialized shipping company. They ship things like airplane parts, windmill rotor blades, large machinery, and ammunition and explosives for the US military. The White House Christmas tree has even been known to show up on a Daseke truck.

This is a company that came into being when entrepreneur Don Daseke saw a massive opportunity to build the very first national flatbed and specialized trucking company.

Since then, he’s made 15 acquisitions of other companies that stand alone and operate as their own entities, but the important thing they share is a fleet of 11,000 trailers and 5,000 tractors that can be shipped around the country to meet the demand where it is popping up.

Now, where Daseke has excelled is that they have gone to great pains to take care of their drivers. They’re looking at new ways to pay them and get more compensation into their pockets so that they actually want to come to work and work for the company.

A lot of their trucks roll out under contract with owner/operators, who tend to show up to work because they have a lot of money invested in their trucks that needs to be paid back, so they’re far more likely not to leave the trucking industry.

Every year, one of their entities is usually on the list of best places to work in the trucking industry. And because they treat their drivers well, they are loyal, and they stay with the company longer, which allows them to ship jobs that other trucking companies simply can’t because they don’t have the drivers and the personnel.

The Fundamentals

Now, this is making for record profits, record sales and a ton of cash flow that is growing the business and allowing it to buy back stock… All of the stuff we love to see in a company. This type of success is attracting the type of large institutional buying pressure that creates the smooth, up-and-to-the-right momentum that we want to see.

The trends we’re seeing in the supply chain are going to be there for a while, and trucking rates are going to continue to be very high. And Daseke is going to be a major beneficiary of that. They raised their guidance for the full year, and analysts are scrambling to raise their estimates for next year.

The stock is still cheap at about 10 times anticipated earnings, so I think this stock has a long runway ahead. We should continue to see institutional money push the stock price up and to the right.