Proof that management matters

Brandon Snow's picture

While at the Leadership Conference in Dallas this October, we had the pleasure of hosting a session featuring one of the most impressive managers we know – Alain Bedard, Chairman and CEO of TransForce (TFI CN).

The value we see in some companies comes from the business model itself: and economic moat it has leading to pricing power and cash flow generation. However in many instances our ownership is as much, or in this case more, about the people and culture of the organization. Alain is the reason we own TransForce and I believe he is one of the most overlooked executives in corporate Canada

The trucking business is a very difficult business. Commoditized offerings, capital intensity and economic sensitivity make it very hard to compound value. However, there are exceptions to every situation and TransForce is that exception in trucking, as seen in the following chart:

Source: Bloomberg (Aug. 31, 1995 - Aug. 31, 2015)

The stock performance is, in many ways, due to Alain’s intensive focus on cash flow and returns. This results in the ability to compound free cash per share over time, as seen in the chart below:

Source: RBC model

While the current environment is very difficult in Canada, the long term value creation Alain has been able to demonstrate is indisputable. The following link is a video of our conversation with Alain from the Leadership Conference this year:

As always, thank you for your support.


Submitted by Carey Vandenberg on

Thanks Brandon, to you and your team for putting this format together. This is the kind of information I find extremely valuable...this helps me really understand the people behind the businesses. It gives me the information I need to explain to clients the kind of businesses they own. It also clearly shows the philosophy of Cambridge. It's not about trading paper but investment managers partnering with a company's management team. I'd love to see more of these. I'll be in Florida for next year's event. I hope you'll continue to provide this kind of information.

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