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Old Dominion Keeps On Delivering And It's Trouncing The Market As A Result


  • Old Dominion Freight Line is an LTL carrier with a terrific business model, allowing it to achieve outperforming growth.
  • While 4Q22 was challenging, the company did a tremendous job growing its operating income, hinting at further pricing gains and bottoming demand.
  • The stock is now up 30% year-to-date, which has caused the risk/reward to become unfavorable.
  • Given economic developments, I'm closely watching ODFL to make it a holding of my dividend growth portfolio.

Old Dominion Freight Line, ODFL, delivery, shipping truck parked in indoor, indoors parking garage, warehouse near Tysons Corner shopping mall



On January 18, I wrote an article titled Old Dominion Is Set To Fly Higher. Unfortunately, I was right, as the stock price has risen more than 15% since then. I'm saying 'unfortunately' as I'm not invested in

This article was written by

Leo Nelissen profile picture

Leo Nelissen is an analyst focusing on major economic developments related to supply chains, infrastructure, and commodities. He is a contributing author for iREIT on Alpha.

As a member of the iREIT on Alpha team, Leo aims to provide insightful analysis and actionable investment ideas, with a particular emphasis on dividend growth opportunities. Learn More.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This article serves the sole purpose of adding value to the research process. Always take care of your own risk management and asset allocation.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (7)

Hillandale Advisors profile picture
oh dear, watch out below folks. Demand has fallen off and pricing is rolling. Not a place you want to be in a contraction. High fixed costs, over spending, when your vols, price and mix goes down. Especially trading at a premium to the market with a lot of covid tailwinds turning the other way.
Tony Montana Munich profile picture
@Hillandale Advisors
energy prices are falling since months...don't worry and think longterm!
I see Old Dominion, Knight Swift, and Werner trucks driving up and down 395 through California and Nevada every day, in that order of quantity. There's lots of cargo to move around and seemingly no end in sight.
mikebond15 profile picture
thank you for your article. in an earlier comment, you recommended entering or adding at $250. unfortunately, to my regret, this limit was never reached again. do you still consider a setback below $300 in 2023 to be realistic or does this share price only know one direction: north-northeast?
very impressive indeed, interesting to see how LTL companies use pricing power to more than make up for the volume/weight decline due to macro conditions. And I remember last Q earning call the executive said OD is keeping thirty percent excess capacity. As volume improves, OD can continue to improve its OR to mid 60s.
The wage decline can be explained by a lot of TL companies and owner operator going bankrupt and their driver coming to LTL to work for big corporations like OD asking for stability over wage potential. And the equipment cost decline is probably due to the supply chain and less demand overall, giving OD more bargaining power.
Tony Montana Munich profile picture
Thanks for the article.

I bought my position in this stock 4 months ago, so I am happy now.
I did a DCF analysis and was surprised, that the stock was undervalued
at roughly 270 USD, where I bought it. This undervaluation was my
reason to buy. But also the technical analysis: A perfect bottoming was
created in the last 12 months…nice stock. I will hold it many years.
Leo Nelissen profile picture
@Tony Montana Munich Awesome! Thank you for your comment! I hope to join you this year as an investor in ODFL.
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