Why Shares of XPO Logistics Surged in April

Shares of XPO Logistics (NYSE: XPO) gained 36.9% in April, according to data provided by S&P Global Market Intelligence, continuing a rally that began late in March as investors continue to grow more confident that the company will be able to ride out the COVID-19 pandemic.

Transport stocks felt the brunt of the COVID-19 crisis earlier than many sectors, as global supply chains were impacted by the initial outbreak in Asia well before the U.S. economy began to slow. Shares of XPO lost 58% from Feb. 22 to March 21 due to fears of a slowdown, and company-specific concerns about XPO's debt load and its ability to manage through an extended downturn.

It has taken time, but the company has done a pretty good job of addressing those fears and beginning to convince investors it will be around for the long haul. The initial catalyst in April was a note from Oppenheimer analyst Scott Schneeberger defending the stock, who argued the sell-off was overdone and that XPO "appears relatively resilient" and undervalued.

Source Fool.com