KNX - Knight-Swift Transportation Holdings Inc.

[Castanza]

Transports and logistics companies have been hammered this past year. I believe the market is mispricing the sector as a whole due to a negative sentiment from trade wars and potential economic woes. Many companies being down 30ish percent. When in reality we are beginning to show an uptick in trucking tonnage with an overall bullish trend. Knight and Swift recently merged and I believe this move is being reflected on top of the overall negative sentiment among transports. Personally I believe it was a good move as both were well run companies. KNX also saw an increase of 25% in quarterly earnings growth yoy and only a -5% quarterly rev growth yoy.  To Compare FDX is up 2.9% QRG and down 65% QEG. JB Hunt up 7.3% QRG and up 1.2% QEG. Old Dominion is up 7 QRG and up 21.9% QEG. But both JB Hunt and Old Dominion are trading well above book value. At the very least KNX is worth a look!

 

https://fred.stlouisfed.org/series/TRUCKD11

 

KNX quick stats

P/E - 11.09

PEG - .71

P/S 1.03

P/B .98

EV/Rev - 1.15

EV/EBITDA 6.11

 

Total Cash 60m

OCF 916m

Debt 981m (increased substantially due to merger)

Debt/Equity 17.7 (lower end of industry)

 

https://investor.knighttrans.com/sites/knighttrans.investorhq.businesswire.com/files/report/file/2018_Annual_Report_and_Proxy_Final.pdf

 

 

 

 

[MrB]

Pardon my ignorance C, but what does QRG mean?

[Spekulatius]

Book value is meaningless, since most of it is goodwill from acquisitions. I follow ODFL (best in class, owner operator) and Werner (WERN), very conservatively managed trucker who grows organically and distributes special dividends from time to time.. I have no position. Right now WERN seems to me the cheapest and it isn’t a bad outfit.

 

I do wonder about the impact of Uber freight, Amazon and FDX/UPS gaining market share.

[Castanza]

Pardon my ignorance C, but what does QRG mean?

 

Just abbreviated quarterly revenue growth and quarterly revenue earnings  :P

[Castanza]

Book value is meaningless, since most of it is goodwill from acquisitions. I follow ODFL (best in class, owner operator) and Werner (WERN), very conservatively managed trucker who grows organically and distributes special dividends from time to time.. I have no position. Right now WERN seems to me the cheapest and it isn’t a bad outfit.

 

I do wonder about the impact of Uber freight, Amazon and FDX/UPS gaining market share.

 

I agree ODFL is best in class. I have had positions in them in the past. WERN is on my list of companies I was looking into. Did you have an opinion on KNX? Or is it simple WERN is the cheapest so no others are worth looking at?

[Gregmal]

Have owned USAK on and off over the years. A steady combination of value, mismanagement, M&A, quasi-fraud, low float, and sector sentiment have made it a pretty spectacular trading vehicle in an OK-ish sector that has historically had its fair share of struggles.

[Spekulatius]

Book value is meaningless, since most of it is goodwill from acquisitions. I follow ODFL (best in class, owner operator) and Werner (WERN), very conservatively managed trucker who grows organically and distributes special dividends from time to time.. I have no position. Right now WERN seems to me the cheapest and it isn’t a bad outfit.

 

I do wonder about the impact of Uber freight, Amazon and FDX/UPS gaining market share.

 

I agree ODFL is best in class. I have had positions in them in the past. WERN is on my list of companies I was looking into. Did you have an opinion on KNX? Or is it simple WERN is the cheapest so no others are worth looking at?

 

It’s always worth looking at all the competitors, so I was just throwing out a few tickets of companies I know out their. I have trouble seeing US trucking as a very attractive sector right now. As you know, I owned a slug of FDX, but bailed due to cash flow concerns. The AMZN Damocles sword should be underestimated either, but they may be a larger threat for the brokers (CHRW).