ASPL/EXPC Data, OC/AWI/TREX/Home Improvement, MSM/GWW, SAVE/Transit & Factors | Industrials Direct

ASPL/EXPC | Data & Updates

It may be fashionable to hate SPACs over the last 7 weeks, but it’s also been a buy in to the post-pandemic travel recovery. ASPL is hosting an Investor Day on April 16^th; we’re assuming that they’ll have some good updates.  Below are the Wheels Up App downloads, which have accelerated into vaccinations. Vaccinations may have unlocked pent-up demand among those with the means and equity market gains to afford premium travel.  We’re most interested in hearing about the Avianis Flight Management Software fleet penetration in the Investor Day – a source of competitive advantage for Wheels Up more critical than brand loyalty, we think. 

It is not just private aviation, but reasonably specific to Wheels Up.

Blade has shown a less clear trend, if past the bottom.  This has disconnected from revenue growth expectations because of live organ transport, new vertiports, and mix changes.  The SPAC deal is expected to close around May 5^th and there should be more coverage of Urban Air Mobility & EVTOL aircraft with Wisk and EmbraerX’s Eve Urban Air Mobility Solutions.  Hybrid work models in the NY/Chicago area should support increased use of Blade services.

OC, EXP, SWK | Deceleration But Still Robust Data

Home improvement spending was a pandemic winner, and some trends coming out appear to be decelerating.  This is just the comp steepening for the most part.

Daily active user counts continue to grow, if somewhat more slowly.

For those interested in TREX, site traffic remains…bullish.  Several investors looking to short TREX have come away long-term longs, although the stock hasn’t been exceptional in recent months.

 

MSM, GWW | MSM Traffic Suggest Difficult Guide

Industrial distributors were partial pandemic winners on safety equipment.  Despite very robust industrial data, this may blunt MSM’s exposure to recovering economic activity.

Grainger’s more recent trend is upward but is not pointing to growth like 2018.  MSM might make a return as a Best Ideas short in 2H21 if data remain weak.

SAVE | App Data Looks Very Robust, Divergent

Have capital markets priced in an end to the pandemic?  Perhaps.  But the consumer is all in on cheap leisure travel, kid-mask-outrage or not.  Spirit looks to be a beneficiary of pent-up demand for travel.  We suspect this demand will be prolonged, with high savings and an itch to get out of town.

Air travel remains well below pre-pandemic levels as business travel has yet to recover.

Transit & Factors

Mass transit isn’t recovering all that well so far. It may simply require more commuters to offices.  We are skeptical of infrastructure projects expanding commuter rail – autonomous buses, perhaps with dedicated lanes, would be vastly cheaper and more flexible. Ridership remains well off pre-pandemic levels. Metro-North & LIRR ridership remains down ~70%-75% from 2019.

NYC Bridge & Tunnel traffic is up YoY, albeit relative to depressed levels versus last March & April – down marginally relative to 2019.

Style factors remain tediously (and excluding SPACs it seems) risk on, with higher leverage, short interest, and beta winning out.