Despite what can best be described as a soft economy, small cap trucking stocks YRC Worldwide, Inc (NASDAQ: YRCW), Arkansas Best Corporation (NASDAQ: ABFS), Frozen Food Express Industries, Inc (NASDAQ: FFEX), Saia Inc (NASDAQ: SAIA) and USA Truck, Inc (NASDAQ: USAK) have been trucking some pretty impressive returns since the start of the year. In fact, these small cap trucking stocks are up anywhere from 72% to 150% or so since the start of the year despite the slow economy. Certainly trucking stocks provide a good indicator of how the economy is doing, but might investors be jumping the gun by pushing up these trucking stocks?
Here is what you need to know about all five:
YRC Worldwide, Inc. One of the largest transportation service providers in the world, YRC Worldwide is the holding company for a portfolio of brands that include YRC Freight, YRC Reimer, New Penn, Holland and Reddaway. Investors should be aware that YRC Worldwide narrowly averted bankruptcy in its fiscal 2009 financial year when it successfully persuading bondholders to exchange their $470 million in bond notes for roughly 94% of the company's shares while in September 2011, the company completed a financial restructuring which essentially wiped out shareholder equity. Last week, YRC Worldwide sank after it reported earnings and missed Wall Street expectations when it reported $1.24 billion in revenue verses the $1.26 billion Wall Street was expecting. YRC Worldwide reported a net loss that narrowed to $15.1 million, or $1.72 per share, from $22.6 million or $3.21 per share for the same period last year, but that loss was far higher than Wall Street's expectations. The company also said it has retained Credit Suisse to help refinance debt or recapitalize the company – something that is probably not a good sign. On Thursday, small cap YRC Worldwide fell 7.36% to $16.74 (YRCW has a 52 week trading range of $5.20 to $36.99 a share) for a market cap of $195.43 million plus the stock is up 149.8% since the start of the year, up 221.9% over the past year and down 99.7% over the past five years.
Arkansas Best Corporation. A freight transportation services and solutions provider whose largest subsidiary is ABF Freight System, Inc that's been in service since 1923, Arkansas Best Corporation has evolved from a local less-than-truckload (LTL) motor carrier into a global provider of customizable supply chain solutions. Last Friday, Arkansas Best Corporation reported earnings that beat expectations. Specifically, Arkansas Best Corporation reported $576.9 million in revenue verses $510.5 million for the same period last year along with net income of $4.9 million verses net income of $11.8 million. Salaries and wages did impact revenues, but management noted a new contract with the Teamsters (once approved, it will run through March 31, 2018) which could clear the road in order to focus on profitability. On Thursday, small cap Arkansas Best Corporation fell 2.21% to $22.97 (ABFS has a 52 week trading range of $6.43 to $24.0 a share) for a market cap of $591.02 million plus the stock is up 148.6% since the start of the year, up 121.7% over the past year and down 40.4% over the past five years.
Frozen Food Express Industries, Inc. One of the leading temperature-controlled truckload and less-than-truckload carriers in the United States, Frozen Food Express Industries has core operations in the transport of temperature-controlled products and perishable goods including food, health care and confectionery products. In mid July, Frozen Food Express Industries announced a definitive agreement where Duff Brothers Capital Corporation, is wholly owned by Thomas and James Duff, who also indirectly own KLLM Transport Services, LLC, would acquire all of the outstanding shares of common stock of FFE for $2.10 in cash per share of common stock in a transaction that valued the company at approximately $38.2 million. The deal is expected to close later this month or by September. Frozen Food Express Industries is up 134.8% since the start of the year, up 27.4% over the past year and down 67.9% over the past five years.
Saia Inc. Offering customers a wide range of less-than-truckload, non-asset truckload and logistic services, Saia Inc operates 147 terminals in 34 states. In late July, Saia Inc reported a 2% revenue increase to $293 million while net income came in at $22.7 million verses $17.4 million. However, the CEO did note that "volumes during the quarter were relatively soft in line with the general economy." It should also be noted that Saia Inc had a three for one stock split on June 13th. On Thursday, small cap Saia Inc fell 0.84% to $28.31 (SAIA has a 52 week trading range of $13.02 to $34.98 a share) for a market cap of $691.41 million plus the stock is up 90% since the start of the year, up 90.1% over the past year and up 115% over the past five years.
USA Truck, Inc. A dry van truckload carrier transporting general commodities via our Truckload and Dedicated Freight service offerings, USA Truck transports commodities throughout the continental United States and into and out of portions of Canada plus the company transports general commodities into and out of Mexico by allowing through-trailer service from its terminal in Laredo, Texas. In late July, USA Truck announced "significantly improved" year-over-year financial and operating results as base revenue increased 7.7% to $111.5 million while the company's net loss came in at $1.0 million ($0.10 per share) verses a net loss of $3.5 million ($0.34 per share) for the same period last year. Despite cost improvements, management noted their belief that "substantial opportunity remains to realize more earnings leverage in our Trucking model in the areas of asset productivity, equipment maintenance, insurance and claims, fuel economy and driver retention." On Thursday, small cap USA Truck rose 0.17% to $5.73 (USAK has a 52 week trading range of $2.65 to $6.89 a share) for a market cap of $60.42 million plus the stock is up 71.6% since the start of the year, up 42.2% over the past year and down 67.7% over the past five years.
Finally, here is a long-term chart for all five small cap trucking stocks:
As you can see from the chart, only Saia Inc has put in a solid long-term performance for investors. With that and all of the above in mind, investors might want to avoid troubled small cap trucking stock YRC Worldwide and recently acquired Frozen Food Express Industries to take a closer look at Saia Inc as well as Arkansas Best Corporation and USA Truck.
No comments:
Post a Comment