For his second "Executive Decision" segment of Mad Money Wednesday night, Jim Cramer spoke with Brad Jacobs, chairman and CEO of XPO Logistics (XPO) , which is splitting itself into two companies in an effort to unlock value for shareholders.
Jacobs explained that XPO has been on a mission to unlock value for over a year now. While some in the logistics space trade for as much as 19 times earnings, XPO trades for just nine times earnings. That's why XPO will split itself into two companies, allowing them to both simplify and reduce their leverage in the process.
Jacobs said that XPO is a major player in the hottest parts of logistics at the moment, from e-commerce to cold chain logistics services.
When asked for some clarity on those vaccine efforts, Jacobs said that while the world is chaotic and disorganized in so many areas at the moment, there are plenty of companies that are doing everything they can for our country and for humanity to help save as many lives as possible.
Cramer said shares of XPO should be "substantially higher" on their earnings alone, not to mention their efforts to unlock the company's hidden value.
Let's check out the charts.
In this daily bar chart of XPO, below, we can see that prices have nearly tripled since the dramatic March low. XPO is in an uptrend and trading above the rising 50-day moving average line and the bullish 200-day moving average line.
The On-Balance-Volume (OBV) line has maintained an uptrend from late March and tells us that buyers of XPO have been more aggressive this year.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has stayed above the zero line since April and is still bullish.
In this weekly bar chart of XPO, below, we can see the bigger picture as prices are poised to test and break the highs of 2018. XPO is trading above the rising 40-week moving average line.
The weekly OBV line shows improvement from March but has yet to best the highs of 2019 and 2018.
The MACD oscillator is giving us the right message - bullish.
In this daily Point and Figure chart of XPO, below, we can see that XPO just made a new high for the move up which refreshes the uptrend and opens the way towards the $126 price target, and would mean that the highs of 2018 could be broken.
In this weekly Point and Figure chart of XPO, below, we can see a longer-term price target of $153.
Bottom line strategy: The charts and indicators of XPO are bullish so traders could operate from the long side risking a close below $98. $126 is our nearest price objective.