The Institutions Go Long Saia, Inc In Q2 

A Turn Of The Tide For Saia, Inc? 

The institutional activity in Saia, Inc (NASDAQ: SAIA) has been vigorous over the past year but largely balanced between the bulls and the bears. The net of activity is $0.07 billion in outflows which is bearish but only mildly so. The takeaway is that institutional activity is running near 100% for this company and has stayed that way for quite some time. The point of interest for us is that heavy selling in Q1 2022 has been replaced by heavy buying in Q2 and that has helped to put a bottom in the stock. 

The institutions have purchased a net 3.85% of the market cap in the quarter-to-date portion of Q2 which brings up another important factor. With institutional activity on the rise in this tightly held name, the short interest is on the rise as well. The stock is about 5.75% short which isn’t extremely high but high enough to provide an updraft if/when the shorts begin covering their positions. 

Saia, Inc Gets Upgraded By UBS 

The analyst's activity in Saia, Inc has been a little mixed this year but the trend is higher. The Insidertrades.com consensus rating is a weak Buy but getting firmer in the wake of a new upgrade. UBS upgraded the stock to Buy from Neutral citing its valuation and growth strategy. The company is expanding its terminal network and depth of services which is viewed as a positive for both top and bottom-line strength. 

“We believe SAIA has an attractive algorithm for multi-year EPS growth based on the expansion of its terminal network, focus on service performance, and consistent pricing which supports margin expansion,” says Thomas Wadewitz. “We expect SAIA's medium-term growth outlook to remain positive despite the signs of a likely downturn in freight activity over the next several quarters.”

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UBS also upped its price target but to a low $240 compared to the Insidertrades.com consensus of $305. That target implies about 60% upside compared to UBS’ target which implies less than half that amount. The takeaway here is the analysts see upside for the stock and the floor for price action is firming. 

After looking at the earnings outlook, we see a potentially bullish catalyst in the Q2 earnings report. The analyst is expecting $718.14 million in net revenue for a gain of 25% over last year. The 25% YOY is great on its own but slowing from the previous quarter and the slowest growth in 5 quarters. The catalyst that we see is that this growth is on top of last year’s 36.55% growth, the first quarter of really tough comps, and there is upside risk in both the revenue and the EPS. More importantly, growth is expected to accelerate on a sequential basis even at the consensus midpoint which is a sign of underlying strength. The risk, of course, will be the guide so any indication of slowing or slowdown could drag on price action. 

The Technical Outlook: Saia, Inc Might Be Bottoming 

Price action in Saia, Inc, might be bottoming but it is too early to tell. The post-earnings action set a new low from which price action is now rebounding but the indications are mixed. While the MACD and stochastic are set up in a very bullish way the MACD has yet to confirm the crossover and price action is still below key resistance at the short-term 30-day EMA and $198. In this light, the indicator setup is more bearish than bullish in that a confirmation of resistance and move lower, specifically to a new low, would trigger bearish crossovers and a strong, trend-following bearish signal. While we are optimistic about Saia’s growth, we are not optimistic enough about the charts to say the stock has bottomed. 

Companies in This Article:

Company	Current Price	Price Change	Dividend Yield	P/E Ratio	Consensus Rating	Consensus Price Target
Saia (SAIA)	$328.43	+0.7%	N/A	31.01	Moderate Buy	$330.10