The views expressed below are those of Anchor Capital Advisors, LLC (‘‘Anchor’’) as of the date written and are subject to change at any time. They are based on our proprietary research of the stated company and the following is a summary of the primary factors that support our beliefs and rationale for investing in the company. Please see additional disclosures at the end of this publication.


GXO Logistics offers high value-add warehousing and distribution, order fulfillment, and other supply chain services. [1] The company was spun out of XPO Logistics on Thursday July 22nd, 2021, and is headquartered in Greenwich, CT. [2] GXO is a global leader in warehouse automation and supply chain management. The company has 885 locations across 27 countries. [3]

Investment Thesis

In our view, GXO should see strong top line growth due to new business wins and growth from existing customers. We believe the company has expertise in the reverse logistics space, which is growing faster than the market. In our opinion, the company’s Smart technology provides productivity improvements. Finally, we believe it is undervalued at the spin off price.

Confirmation through Research

GXO should see top line growth thanks to both market growth and new business wins. 50% of revenues come from e-commerce, which has led market they play in to grow 4%. [4] Further, GXO is expected to have a 5% to 8% organic growth coming from new business wins, and 3% to 4% growth in existing facilities. [5] All in we expect growth to be close to double digits on the top line. 30% of GXO customers utilize reverse logistics, which is a complicated business that GXO has strong expertise in. The revenue for reverse logistics has grown at 16% per year for the last two years. [6] GXO Smart Technology optimizes labor leading to 5% to 7% productivity improvements. It is currently in 60% of GXO sites. [7] Finally, the company at is valued at 12x 2022 expected EBITDA, with peers selling for 15x EBITDA. [8]

Variant Perception

We do not believe the market is assigning fair value to the business considering the growth of the business through new contract wins, the pricing power at existing sites, and the opportunity in Smart Technology/reverse logistics over the long run.