School’s Student Managed Investment Fund Takes a Look at Ryder
March 24, 2016
Robert Sanchez, BSEE ’87, presenting to students in
Ryder System Inc. is well-positioned to take advantage of growth opportunities in today’s market and create long-term value for its shareholders, according to Robert Sanchez chairman and CEO of the Miami-based transportation and logistics solutions company.
“We expect a 6 percent increase in revenue in 2016, while earnings will be flat or up slightly,” said Sanchez, BSEE ’87, at a March 16 financial presentation to 30 School of Business undergraduate and graduate students active in the School’s Student Managed Investment Fund (SMIF). The presentation was among many the students hear throughout the year as they determine what stocks to buy, sell and hold in the real investment portfolio that they manage.
Andrea Heuson, professor of finance, and Brian Barrett, associate professor of finance, – co-directors of the SMIF – introduced Sanchez, and welcomed Mark Coe, managing member, Coe Capital Management, who donated seed money to launch the SMIF five years ago.
“It is a rare privilege to have a CEO like Robert Sanchez provide his first-hand perspective to the students making investment decisions for the fund,” Coe said. “This type of experience is excellent preparation for becoming a financial analyst, and gives you tools to make informed decisions regarding your own investment portfolios later in life.”
Mark Coe, who donated seed money to launch SMIF,
In his presentation, Sanchez paid tribute to the company’s founder, Jim Ryder, who invested in a truck to haul building materials to Miami Beach in 1933, and traced Ryder’s growth path through the decades.
Today, Ryder is a $6.6 billion Fortune 500 company with three business segments: Fleet Management Solutions, which focuses on leasing trucks to commercial customers; Dedicated Transportation Solutions, which provides drivers, trucks and other services; and Supply Chain Solutions, which serves global leaders in the automotive, distribution and manufacturing industries
Only 10 percent of the U.S. commercial trucking market is now outsourced – with Ryder holding 3 percent – so there are numerous growth opportunities, Sanchez said. “Our solutions typically save a customer 10 to 15 percent a year,” he added.
Many businesses today find it difficult to recruit qualified commercial drivers, maintain their trucks and comply with federal regulations, Sanchez said. “That has increased demand for outsourced services, including our dedicated transportation solutions group, which is an important part of our growth story,” he said.
After giving his presentation, Sanchez fielded questions from students and four South Florida financial professionals, Richard Bermont, Richard Jacobs, Bill Pruitt and Jason Goldstrich, who are unofficial advisors to the SMIF, whose earnings are dedicated to supporting the educational activities of School of Business students.
Responding to a question about a possible “Uber-like” trucking service that could cut into Ryder’s market, Sanchez said it would be difficult to develop a national service and maintenance infrastructure like Ryder’s in a transportation sector that is heavily regulated.
Then, Sanchez took a seat in the classroom and listened to students Daniel Moubayed and Gian Luca Olivieri present their team’s financial analysis of Ryder. “Our findings indicate a valuation of $70 per share,” said Olivieri.
Sanchez complimented the students for their thorough presentation. “You have the same challenge as professional investors in determining how to value a Fortune 500 company with three lines of business,” he said.
Daniel Moubayed and Gian Luca Olivieri presenting
Undergraduate Steve Smith said he learned a great deal from Sanchez’s presentation, about the direction Ryder is heading. “The company is well positioned to combat a downturn in the market,” he said.
Classmate Paul Huether, undergraduate, agreed. “I liked what Mr. Sanchez had to say” he said. “But I don’t think I’d buy Ryder now because of the U.S. economy seems to be slowing.”
Reflecting on the class, Heuson said she enjoys watching students develop their presentation skills as they gain experience in pitching their recommendations. “After they study a stock, they can converse knowledgeably with investment professionals, putting them in a superior position for job interviews,” she said. “They were even comfortable presenting their valuation work on Ryder to the CEO – a great example of their confidence in their work.”