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Landstar System Inc Valuation – Initial Coverage $LSTR

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – March 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Landstar System Inc (LSTR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Landstar System, Inc. (Landstar) is an asset-light provider of integrated transportation management solutions. The Company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to enterprise solutions to manage customer’s transportation needs. It operates in two segments: the Transportation Logistics segment and the Insurance segment. The Transportation Logistics segment provides a range of integrated transportation management solutions. Transportation services offered by it include truckload and less-than-truckload transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul or specialized, the United States-Canada and the United States-Mexico cross-border, project cargo and customs brokerage. The insurance segment consists of Signature Insurance Company, which is an offshore insurance subsidiary, and Risk Management Claim Services, Inc.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of LSTR – June 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $3,532,170,972 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.03 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 89.50% Pass
6. Moderate PEmg Ratio PEmg < 20 38.99 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 6.17 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.03 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.22 Pass
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg $2.16
MG Growth Estimate -2.51%
MG Value $7.51
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $31.33
MG Value based on 0% Growth $18.37
Market Implied Growth Rate 15.25%
Current Price $84.25
% of Intrinsic Value 1121.90%

Landstar System, Inc. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor.  The Defensive Investor is concerned with the  insufficient earnings stability over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the lack of earnings stability or growth over the last five years.  As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $2.6 in 2013 to an estimated $2.16 for 2017.  This level of demonstrated earnings growth does not support the market’s implied estimate of 15.25% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Landstar System, Inc. revealed the company was trading above its Graham Number of $0.  The company pays a dividend of $0.34 per share, for a yield of 0.4%  Its PEmg (price over earnings per share – ModernGraham) was 38.99, which was above the industry average of 31.63.  Finally, the company was trading above its Net Current Asset Value (NCAV) of $5.16.

Landstar System, Inc. scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $5.16
Graham Number $0.00
PEmg 38.99
Current Ratio 2.03
PB Ratio 6.17
Current Dividend $0.34
Dividend Yield 0.40%
Number of Consecutive Years of Dividend Growth 3

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2017
Total Current Assets $749,006,000
Total Current Liabilities $368,637,000
Long-Term Debt $82,987,000
Total Assets $1,106,142,000
Intangible Assets $31,134,000
Total Liabilities $532,399,000
Shares Outstanding (Diluted Average) 41,998,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate
Dec2016 $3.25
Dec2015 $3.37
Dec2014 $3.07
Dec2013 $3.16
Dec2012 $2.77
Dec2011 $2.38
Dec2010 $1.77
Dec2009 $1.37
Dec2008 $2.10
Dec2007 $1.99
Dec2006 $1.93
Dec2005 $1.91
Dec2004 $1.16
Dec2003 $0.79
Dec2002 $0.74
Dec2001 $0.63
Dec2000 $0.63
Dec1999 $0.57
Dec1998 $0.13
Dec1997 $0.25

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.16
Dec2016 $3.20
Dec2015 $3.10
Dec2014 $2.86
Dec2013 $2.60
Dec2012 $2.23
Dec2011 $1.95
Dec2010 $1.77
Dec2009 $1.80
Dec2008 $1.95
Dec2007 $1.77
Dec2006 $1.54
Dec2005 $1.24
Dec2004 $0.87
Dec2003 $0.71
Dec2002 $0.62
Dec2001 $0.52

Recommended Reading:

Other ModernGraham posts about the company

None.  This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Kirby Corporation Valuation – Initial Coverage $KEX
Knight Transportation Valuation – Initial Coverage $KNX
United Parcel Service Inc Valuation – February 2017 $UPS
SPS Commerce Inc Valuation – Initial Coverage $SPSC
J B Hunt Transport Services Inc Valuation – Initial Coverage $JBHT
Celadon Group Inc Valuation – Initial Coverage $CGI
Saia Inc Valuation – Initial Coverage $SAIA
C.H. Robinson Worldwide Inc Valuation – August 2016 $CHRW
FedEx Corp Valuation – July 2016 $FDX
Ryder System Inc Valuation – July 2016 $R

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Kirby Corp Valuation – September 2018 $KEX

Company Profile (excerpt from Reuters): Kirby Corporation, incorporated on January 31, 1969, is a domestic tank barge operator, transporting bulk liquid products throughout the Mississippi River System, on the Gulf Intracoastal Waterway, coastwise along all three United States coasts and in Alaska and Hawaii. The Company, through its subsidiaries, operates in two segments: Marine Transportation and Diesel Engine Services.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of KEX – September 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $4,598,246,813 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.86 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 34.27% Pass
6. Moderate PEmg Ratio PEmg < 20 21.03 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.44 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.86 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 3.01 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.65
MG Growth Estimate -1.83%
MG Value $17.67
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $52.96
MG Value based on 0% Growth $31.05
Market Implied Growth Rate 6.26%
Current Price $76.80
% of Intrinsic Value 434.67%

Kirby Corporation does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, poor dividend history, and the high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings growth over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $4.16 in 2014 to an estimated $3.65 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 6.26% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Kirby Corporation revealed the company was trading above its Graham Number of $51.48. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 21.03, which was below the industry average of 24.84, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-26.9.

Kirby Corporation scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$26.90
Graham Number $51.48
PEmg 21.03
Current Ratio 1.86
PB Ratio 1.44
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $1,035,332,000
Total Current Liabilities $556,318,000
Long-Term Debt $1,442,513,000
Total Assets $5,829,276,000
Intangible Assets $1,195,719,000
Total Liabilities $2,641,585,000
Shares Outstanding (Diluted Average) 59,720,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.26
Dec2017 $5.62
Dec2016 $2.62
Dec2015 $4.11
Dec2014 $4.93
Dec2013 $4.44
Dec2012 $3.73
Dec2011 $3.33
Dec2010 $2.15
Dec2009 $2.34
Dec2008 $2.91
Dec2007 $2.29
Dec2006 $1.79
Dec2005 $1.33
Dec2004 $0.99
Dec2003 $0.84
Dec2002 $0.57
Dec2001 $0.82
Dec2000 $0.70
Dec1999 $0.51
Dec1998 $0.23

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.65
Dec2017 $4.35
Dec2016 $3.80
Dec2015 $4.29
Dec2014 $4.16
Dec2013 $3.58
Dec2012 $3.07
Dec2011 $2.69
Dec2010 $2.35
Dec2009 $2.34
Dec2008 $2.18
Dec2007 $1.69
Dec2006 $1.30
Dec2005 $1.00
Dec2004 $0.82
Dec2003 $0.72
Dec2002 $0.63

Recommended Reading:

Other ModernGraham posts about the company

Kirby Corporation Valuation – Initial Coverage $KEX

Other ModernGraham posts about related companies

Knight-Swift Transportation Holdings Inc Valuation – August 2018 $KNX
Saia Inc Valuation – July 2018 $SAIA
Ryder System Inc Valuation – June 2018 $R
United Parcel Service Inc Valuation – May 2018 $UPS
JB Hunt Transport Services Inc Valuation – May 2018 $JBHT
C.H. Robinson Worldwide Inc Valuation – April 2018 $CHRW
FedEx Corp Valuation – April 2018 $FDX
Expeditors International of Washington Inc Valuation – March 2018 $EXPD
TFI International Inc Valuation – Initial Coverage $TSE:TFII
Landstar System Inc Valuation – Initial Coverage $LSTR

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Knight-Swift Transportation Holdings Inc Valuation – August 2018 $KNX

 

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of KNX – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $5,840,169,100 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.47 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 274.51% Pass
6. Moderate PEmg Ratio PEmg < 20 13.99 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.10 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.47 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.33 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.38
MG Growth Estimate 15.00%
MG Value $91.45
Opinion Undervalued
MG Grade A-
MG Value based on 3% Growth $34.44
MG Value based on 0% Growth $20.19
Market Implied Growth Rate 2.74%
Current Price $33.22
% of Intrinsic Value 36.33%

Knight-Swift Transportation Holdings Inc qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the low current ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.95 in 2014 to an estimated $2.38 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.74% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Knight-Swift Transportation Holdings Inc revealed the company was trading below its Graham Number of $37.64. The company pays a dividend of $0.24 per share, for a yield of 0.7% Its PEmg (price over earnings per share – ModernGraham) was 13.99, which was below the industry average of 39.96, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-7.89.

Knight-Swift Transportation Holdings Inc fares extremely well in the ModernGraham grading system, scoring an A-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$7.89
Graham Number $37.64
PEmg 13.99
Current Ratio 1.47
PB Ratio 1.10
Current Dividend $0.24
Dividend Yield 0.72%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $941,332,000
Total Current Liabilities $641,221,000
Long-Term Debt $699,473,000
Total Assets $7,753,741,000
Intangible Assets $4,360,291,000
Total Liabilities $2,357,357,000
Shares Outstanding (Diluted Average) 179,398,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.14
Dec2017 $4.34
Dec2016 $1.16
Dec2015 $1.42
Dec2014 $1.25
Dec2013 $0.86
Dec2012 $0.80
Dec2011 $0.74
Dec2010 $0.70
Dec2009 $0.60
Dec2008 $0.66
Dec2007 $0.72
Dec2006 $0.84
Dec2005 $0.71
Dec2004 $0.55
Dec2003 $0.41
Dec2002 $0.32
Dec2001 $0.24
Dec2000 $0.24
Dec1999 $0.20
Dec1998 $0.17

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.38
Dec2017 $2.26
Dec2016 $1.18
Dec2015 $1.13
Dec2014 $0.95
Dec2013 $0.78
Dec2012 $0.73
Dec2011 $0.69
Dec2010 $0.68
Dec2009 $0.68
Dec2008 $0.71
Dec2007 $0.71
Dec2006 $0.66
Dec2005 $0.53
Dec2004 $0.41
Dec2003 $0.32
Dec2002 $0.26

Recommended Reading:

Other ModernGraham posts about the company

Knight Transportation Valuation – Initial Coverage $KNX

Other ModernGraham posts about related companies

Saia Inc Valuation – July 2018 $SAIA
Ryder System Inc Valuation – June 2018 $R
United Parcel Service Inc Valuation – May 2018 $UPS
JB Hunt Transport Services Inc Valuation – May 2018 $JBHT
C.H. Robinson Worldwide Inc Valuation – April 2018 $CHRW
FedEx Corp Valuation – April 2018 $FDX
Expeditors International of Washington Inc Valuation – March 2018 $EXPD
TFI International Inc Valuation – Initial Coverage $TSE:TFII
Landstar System Inc Valuation – Initial Coverage $LSTR
Kirby Corporation Valuation – Initial Coverage $KEX

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Saia Inc Valuation – July 2018 $SAIA

Company Profile (excerpt from Reuters): Saia, Inc., incorporated on February 4, 2000, is a transportation company. The Company provides regional and interregional less-than-truckload (LTL) services. The Company also offers a range of other value-added services, including non-asset truckload, expedited and logistics services across the United States.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of SAIA – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $2,044,279,518 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.26 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 5657.96% Pass
6. Moderate PEmg Ratio PEmg < 20 27.36 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.50 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.26 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.70 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.96
MG Growth Estimate 15.00%
MG Value $113.78
Opinion Undervalued
MG Grade C-
MG Value based on 3% Growth $42.85
MG Value based on 0% Growth $25.12
Market Implied Growth Rate 9.43%
Current Price $80.85
% of Intrinsic Value 71.06%

Saia Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1.47 in 2014 to an estimated $2.96 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 9.43% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Saia Inc revealed the company was trading above its Graham Number of $43.45. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 27.36, which was below the industry average of 184.17, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-6.92.

Saia Inc receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$6.92
Graham Number $43.45
PEmg 27.36
Current Ratio 1.26
PB Ratio 3.50
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $225,999,000
Total Current Liabilities $178,677,000
Long-Term Debt $127,782,000
Total Assets $1,015,547,000
Intangible Assets $23,686,000
Total Liabilities $408,153,000
Shares Outstanding (Diluted Average) 26,308,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.68
Dec2017 $3.49
Dec2016 $1.87
Dec2015 $2.16
Dec2014 $2.04
Dec2013 $1.73
Dec2012 $1.29
Dec2011 $0.47
Dec2010 $0.08
Dec2009 -$0.39
Dec2008 -$1.04
Dec2007 $0.87
Dec2006 -$0.95
Dec2005 $1.21
Dec2004 $0.84
Dec2003 $0.66
Dec2002 -$2.87
Dec2001 $0.03
Dec2000 $0.08
Dec1999 $0.45
Dec1998 $0.42

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.96
Dec2017 $2.48
Dec2016 $1.92
Dec2015 $1.81
Dec2014 $1.47
Dec2013 $1.00
Dec2012 $0.45
Dec2011 $0.02
Dec2010 -$0.23
Dec2009 -$0.28
Dec2008 -$0.09
Dec2007 $0.44
Dec2006 $0.07
Dec2005 $0.38
Dec2004 -$0.11
Dec2003 -$0.50
Dec2002 -$0.84

Recommended Reading:

Other ModernGraham posts about the company

Saia Inc Valuation – Initial Coverage $SAIA

Other ModernGraham posts about related companies

United Parcel Service Inc Valuation – May 2018 $UPS
JB Hunt Transport Services Inc Valuation – May 2018 $JBHT
C.H. Robinson Worldwide Inc Valuation – April 2018 $CHRW
FedEx Corp Valuation – April 2018 $FDX
Expeditors International of Washington Inc Valuation – March 2018 $EXPD
TFI International Inc Valuation – Initial Coverage $TSE:TFII
Landstar System Inc Valuation – Initial Coverage $LSTR
Kirby Corporation Valuation – Initial Coverage $KEX
Knight Transportation Valuation – Initial Coverage $KNX
United Parcel Service Inc Valuation – February 2017 $UPS

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Ryder System Inc Valuation – June 2018 $R

Company Profile (excerpt from Reuters): Ryder System, Inc., incorporated on March 22, 1955, offers transportation and supply chain management solutions. The Company operates through three segments: Fleet Management Solutions (FMS), which provides leasing, commercial rental, contract maintenance and contract-related maintenance of trucks, tractors and trailers to customers principally in the United States, Canada and the United Kingdom; Dedicated Transportation Solutions (DTS), which provides vehicles and drivers as part of a dedicated transportation solution in the United States, and Supply Chain Solutions (SCS), which provides supply chain solutions, including distribution and transportation services in North America and Asia. Through its FMS business, the Company provides its customers with various fleet solutions. In addition, the Company provides its customers to purchase a selection of used trucks, tractors and trailers through its used vehicle sales program. Its customer base includes enterprise operating in various industries, including food and beverage service, transportation and warehousing, automotive, retail and consumer goods, industrial, housing, technology, business and personal services, and other.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of R – June 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $3,827,903,833 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.72 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 278.31% Pass
6. Moderate PEmg Ratio PEmg < 20 9.26 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.33 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.72 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -10.04 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $7.76
MG Growth Estimate 14.24%
MG Value $287.06
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $112.58
MG Value based on 0% Growth $65.99
Market Implied Growth Rate 0.38%
Current Price $71.86
% of Intrinsic Value 25.03%

Ryder System, Inc. qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the low current ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $3.98 in 2014 to an estimated $7.76 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.38% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Ryder System, Inc. revealed the company was trading below its Graham Number of $80.27. The company pays a dividend of $1.8 per share, for a yield of 2.5%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 9.26, which was below the industry average of 183.89, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-142.72.

Ryder System, Inc. fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$142.72
Graham Number $80.27
PEmg 9.26
Current Ratio 0.72
PB Ratio 1.33
Current Dividend $1.80
Dividend Yield 2.50%
Number of Consecutive Years of Dividend Growth 13

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $1,311,521,000
Total Current Liabilities $1,809,280,000
Long-Term Debt $4,999,770,000
Total Assets $11,736,157,000
Intangible Assets $421,868,000
Total Liabilities $8,877,342,000
Shares Outstanding (Diluted Average) 53,013,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.35
Dec2017 $14.87
Dec2016 $4.90
Dec2015 $5.71
Dec2014 $4.11
Dec2013 $4.53
Dec2012 $4.09
Dec2011 $3.28
Dec2010 $2.25
Dec2009 $1.11
Dec2008 $3.50
Dec2007 $4.24
Dec2006 $4.04
Dec2005 $3.52
Dec2004 $3.28
Dec2003 $2.06
Dec2002 $1.50
Dec2001 $0.31
Dec2000 $1.48
Dec1999 $6.11
Dec1998 $2.16

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $7.76
Dec2017 $8.26
Dec2016 $4.85
Dec2015 $4.67
Dec2014 $3.98
Dec2013 $3.63
Dec2012 $3.07
Dec2011 $2.66
Dec2010 $2.58
Dec2009 $2.92
Dec2008 $3.79
Dec2007 $3.77
Dec2006 $3.32
Dec2005 $2.68
Dec2004 $2.08
Dec2003 $1.75
Dec2002 $1.84

Recommended Reading:

Other ModernGraham posts about the company

10 Low PE Stock Picks for the Defensive Investor – February 2017
10 Undervalued Companies for the Defensive Investor – February 2017
10 Undervalued Companies for the Defensive Investor – January 2017
10 Undervalued Stocks for the Defensive Investor – December 2016
10 Undervalued Stocks for the Defensive Investor – September 2016

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United Parcel Service Inc Valuation – February 2017 $UPS

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

United Parcel Service Inc Valuation – May 2018 $UPS

Company Profile (excerpt from Reuters): United Parcel Service, Inc. (UPS), incorporated on July 15, 1999, is a package delivery company. The Company is a provider of global supply chain management solutions. The Company operates through three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations. As of December 31, 2016, the Company delivered packages in over 220 countries and territories. WorldShip, a desktop shipping application of UPS, provides middle-market and customers with shipping capabilities. Customers can create custom labels, set up shipment alerts, create and upload customs documentation, track and export shipments, create reports and integrate with their enterprise resource planning and accounting systems to streamline shipping with real-time connectivity. UPS marketplace shipping, which integrates www.ups.com with eBay, Amazon, Etsy and BigCommerce, allows marketplace sellers to ship their orders through www.ups.com or WorldShip. UPS marketplace shipping provides shipment processing, multiple payment options (including PayPal), order and shipment history and automatic tracking updates. The Company serves the global market for logistics services, which include transportation, distribution, contract logistics, ground freight, ocean freight, air freight, customs brokerage, insurance and financing.

UPS Chart

UPS data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of UPS – May 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $100,432,797,598 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.22 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 78.63% Pass
6. Moderate PEmg Ratio PEmg < 20 20.66 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 74.69 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.22 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 8.26 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $5.59
MG Growth Estimate 11.00%
MG Value $170.32
Opinion Undervalued
MG Grade C
MG Value based on 3% Growth $80.99
MG Value based on 0% Growth $47.48
Market Implied Growth Rate 6.08%
Current Price $115.38
% of Intrinsic Value 67.74%

United Parcel Service, Inc. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $3.22 in 2014 to an estimated $5.59 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 6.08% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into United Parcel Service, Inc. revealed the company was trading above its Graham Number of $13.68. The company pays a dividend of $3.32 per share, for a yield of 2.9%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 20.66, which was below the industry average of 171.35, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-33.91.

United Parcel Service, Inc. receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$33.91
Graham Number $13.68
PEmg 20.66
Current Ratio 1.22
PB Ratio 74.69
Current Dividend $3.32
Dividend Yield 2.88%
Number of Consecutive Years of Dividend Growth 8

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $13,620,000,000
Total Current Liabilities $11,149,000,000
Long-Term Debt $20,409,000,000
Total Assets $44,464,000,000
Intangible Assets $5,918,000,000
Total Liabilities $43,120,000,000
Shares Outstanding (Diluted Average) 870,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $7.15
Dec2017 $5.61
Dec2016 $3.87
Dec2015 $5.35
Dec2014 $3.28
Dec2013 $4.61
Dec2012 $0.83
Dec2011 $3.84
Dec2010 $3.33
Dec2009 $2.14
Dec2008 $2.94
Dec2007 $0.36
Dec2006 $3.86
Dec2005 $3.47
Dec2004 $2.93
Dec2003 $2.55
Dec2002 $2.81
Dec2001 $2.10
Dec2000 $2.50
Dec1999 $0.77
Dec1998 $1.57

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.59
Dec2017 $4.72
Dec2016 $4.04
Dec2015 $3.95
Dec2014 $3.22
Dec2013 $3.11
Dec2012 $2.45
Dec2011 $3.01
Dec2010 $2.57
Dec2009 $2.32
Dec2008 $2.51
Dec2007 $2.40
Dec2006 $3.33
Dec2005 $2.96
Dec2004 $2.67
Dec2003 $2.40
Dec2002 $2.20

Recommended Reading:

Other ModernGraham posts about the company

United Parcel Service Inc Valuation – February 2017 $UPS
United Parcel Service Inc. Valuation – October 2015 Update $UPS
27 Companies in the Spotlight This Week – 11/8/14
United Parcel Service Inc. Annual Valuation – 2014 $UPS
19 Companies in the Spotlight This Week – 7/26/14

Other ModernGraham posts about related companies

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TFI International Inc Valuation – Initial Coverage $TSE:TFII
Landstar System Inc Valuation – Initial Coverage $LSTR
Kirby Corporation Valuation – Initial Coverage $KEX
Knight Transportation Valuation – Initial Coverage $KNX
United Parcel Service Inc Valuation – February 2017 $UPS
SPS Commerce Inc Valuation – Initial Coverage $SPSC

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

JB Hunt Transport Services Inc Valuation – May 2018 $JBHT

Company Profile (excerpt from Reuters): J.B. Hunt Transport Services, Inc., incorporated on September 10, 1961, is a holding company. The Company is a surface transportation, delivery, and logistics company in North America. The Company, through its subsidiaries, provides transportation and delivery services to a range of customers and consumers throughout the continental United States, Canada and Mexico. The Company operates through four segments, which include Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS) and Truck (JBT). The Company’s service offerings include transportation of full- truckload containerized freight, customized freight movement, revenue equipment, labor, systems and delivery services.

JBHT Chart

JBHT data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of JBHT – May 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $12,796,409,795 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.13 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 218.43% Pass
6. Moderate PEmg Ratio PEmg < 20 24.52 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 6.70 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.13 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 5.24 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $4.79
MG Growth Estimate 11.39%
MG Value $149.78
Opinion Fairly Valued
MG Grade D+
MG Value based on 3% Growth $69.44
MG Value based on 0% Growth $40.70
Market Implied Growth Rate 8.01%
Current Price $117.42
% of Intrinsic Value 78.40%

J B Hunt Transport Services Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $2.72 in 2014 to an estimated $4.79 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 8.01% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into J B Hunt Transport Services Inc revealed the company was trading above its Graham Number of $43.59. The company pays a dividend of $0.92 per share, for a yield of 0.8% Its PEmg (price over earnings per share – ModernGraham) was 24.52, which was below the industry average of 171.35, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-11.21.

J B Hunt Transport Services Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$11.21
Graham Number $43.59
PEmg 24.52
Current Ratio 1.13
PB Ratio 6.70
Current Dividend $0.92
Dividend Yield 0.78%
Number of Consecutive Years of Dividend Growth 4

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $1,236,064,000
Total Current Liabilities $1,092,516,000
Long-Term Debt $752,423,000
Total Assets $4,421,657,000
Intangible Assets $113,464,000
Total Liabilities $2,478,594,000
Shares Outstanding (Diluted Average) 110,863,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.04
Dec2017 $6.18
Dec2016 $3.81
Dec2015 $3.66
Dec2014 $3.16
Dec2013 $2.87
Dec2012 $2.59
Dec2011 $2.11
Dec2010 $1.56
Dec2009 $1.05
Dec2008 $1.56
Dec2007 $1.55
Dec2006 $1.44
Dec2005 $1.28
Dec2004 $0.88
Dec2003 $0.58
Dec2002 $0.33
Dec2001 $0.23
Dec2000 $0.26
Dec1999 $0.23
Dec1998 $0.32

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $4.79
Dec2017 $4.42
Dec2016 $3.43
Dec2015 $3.12
Dec2014 $2.72
Dec2013 $2.35
Dec2012 $1.98
Dec2011 $1.64
Dec2010 $1.41
Dec2009 $1.35
Dec2008 $1.45
Dec2007 $1.31
Dec2006 $1.10
Dec2005 $0.84
Dec2004 $0.56
Dec2003 $0.38
Dec2002 $0.27

Recommended Reading:

Other ModernGraham posts about the company

J B Hunt Transport Services Inc Valuation – Initial Coverage $JBHT

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Landstar System Inc Valuation – Initial Coverage $LSTR
Kirby Corporation Valuation – Initial Coverage $KEX
Knight Transportation Valuation – Initial Coverage $KNX
United Parcel Service Inc Valuation – February 2017 $UPS
SPS Commerce Inc Valuation – Initial Coverage $SPSC
J B Hunt Transport Services Inc Valuation – Initial Coverage $JBHT

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

C.H. Robinson Worldwide Inc Valuation – April 2018 $CHRW

Company Profile (excerpt from Reuters): C.H. Robinson Worldwide, Inc. (C.H. Robinson), incorporated on August 11, 1997, is a third-party logistics company. The Company provides freight transportation services and logistics solutions to companies of a range of industries. The Company’s segments include North American Surface Transportation (NAST), Global Forwarding, Robinson Fresh, and All Other and Corporate. It operates through a network of offices in North America, Europe, Asia, Australia, New Zealand and South America. The Company also develops global transportation and distribution networks to provide transportation and supply chain services throughout the world.

CHRW Chart

CHRW data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CHRW – April 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $13,052,893,377 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.26 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 58.47% Pass
6. Moderate PEmg Ratio PEmg < 20 25.47 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 9.33 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.26 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.43 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.69
MG Growth Estimate 3.71%
MG Value $58.82
Opinion Overvalued
MG Grade C-
MG Value based on 3% Growth $53.57
MG Value based on 0% Growth $31.40
Market Implied Growth Rate 8.49%
Current Price $94.12
% of Intrinsic Value 160.01%

C.H. Robinson Worldwide Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $2.96 in 2014 to an estimated $3.69 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 8.49% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into C.H. Robinson Worldwide Inc revealed the company was trading above its Graham Number of $30.53. The company pays a dividend of $1.81 per share, for a yield of 1.9% Its PEmg (price over earnings per share – ModernGraham) was 25.47, which was below the industry average of 36.51, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-2.12.

C.H. Robinson Worldwide Inc receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$2.12
Graham Number $30.53
PEmg 25.47
Current Ratio 1.26
PB Ratio 9.33
Current Dividend $1.81
Dividend Yield 1.92%
Number of Consecutive Years of Dividend Growth 20

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Total Current Assets $2,510,936,000
Total Current Liabilities $1,987,449,000
Long-Term Debt $750,000,000
Total Assets $4,235,834,000
Intangible Assets $1,427,401,000
Total Liabilities $2,810,089,000
Shares Outstanding (Diluted Average) 141,319,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $4.06
Dec2017 $3.57
Dec2016 $3.59
Dec2015 $3.51
Dec2014 $3.05
Dec2013 $2.65
Dec2012 $3.67
Dec2011 $2.62
Dec2010 $2.33
Dec2009 $2.13
Dec2008 $2.08
Dec2007 $1.86
Dec2006 $1.53
Dec2005 $1.16
Dec2004 $0.79
Dec2003 $0.62
Dec2002 $0.52
Dec2001 $0.47
Dec2000 $0.41
Dec1999 $0.32
Dec1998 $0.26

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.69
Dec2017 $3.43
Dec2016 $3.34
Dec2015 $3.18
Dec2014 $2.96
Dec2013 $2.84
Dec2012 $2.81
Dec2011 $2.32
Dec2010 $2.11
Dec2009 $1.92
Dec2008 $1.70
Dec2007 $1.41
Dec2006 $1.09
Dec2005 $0.82
Dec2004 $0.62
Dec2003 $0.51
Dec2002 $0.44

Recommended Reading:

Other ModernGraham posts about the company

C.H. Robinson Worldwide Inc. Analysis – 2015 Update $CHRW
19 Companies in the Spotlight This Week – 7/26/14
C.H. Robinson Worldwide Inc. Annual Valuation – 2014 $CHRW

Other ModernGraham posts about related companies

FedEx Corp Valuation – April 2018 $FDX
Expeditors International of Washington Inc Valuation – March 2018 $EXPD
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Landstar System Inc Valuation – Initial Coverage $LSTR
Kirby Corporation Valuation – Initial Coverage $KEX
Knight Transportation Valuation – Initial Coverage $KNX
United Parcel Service Inc Valuation – February 2017 $UPS
SPS Commerce Inc Valuation – Initial Coverage $SPSC
J B Hunt Transport Services Inc Valuation – Initial Coverage $JBHT
Celadon Group Inc Valuation – Initial Coverage $CGI

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

FedEx Corp Valuation – April 2018 $FDX

Company Profile (excerpt from Reuters): FedEx Corporation (FedEx), incorporated on October 2, 1997, provides a portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand. The Company’s segments include FedEx Express, TNT Express, FedEx Ground, FedEx Freight and FedEx Services. The FedEx Express segment offers a range of the United States domestic and international shipping services for delivery of packages and freight. TNT Express segment collects, transports and delivers documents, parcels and freight on a day-definite or time-definite basis. The FedEx Ground segment provides business and residential money-back guaranteed ground package delivery services. The FedEx Freight segment offers less-than-truckload (LTL) freight services. The FedEx Services segment provides the Company’s other companies with sales, marketing, information technology, communications, customer service and other back-office support.

FDX Chart

FDX data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FDX – April 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $64,161,040,154 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.43 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 305.67% Pass
6. Moderate PEmg Ratio PEmg < 20 21.70 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.47 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.43 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 3.93 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $11.06
MG Growth Estimate 9.00%
MG Value $293.07
Opinion Fairly Valued
MG Grade D+
MG Value based on 3% Growth $160.41
MG Value based on 0% Growth $94.03
Market Implied Growth Rate 6.60%
Current Price $240.11
% of Intrinsic Value 81.93%

FedEx Corporation does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $6.92 in 2014 to an estimated $11.06 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 6.6% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into FedEx Corporation revealed the company was trading above its Graham Number of $153.46. The company pays a dividend of $1.6 per share, for a yield of 0.7% Its PEmg (price over earnings per share – ModernGraham) was 21.7, which was below the industry average of 36.51, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-71.

FedEx Corporation scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$71.00
Graham Number $153.46
PEmg 21.70
Current Ratio 1.43
PB Ratio 3.47
Current Dividend $1.60
Dividend Yield 0.67%
Number of Consecutive Years of Dividend Growth 7

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 2/1/2018
Total Current Assets $13,575,000,000
Total Current Liabilities $9,503,000,000
Long-Term Debt $16,017,000,000
Total Assets $51,851,000,000
Intangible Assets $7,464,000,000
Total Liabilities $32,957,000,000
Shares Outstanding (Diluted Average) 273,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $17.47
May2017 $11.07
May2016 $6.51
May2015 $3.65
May2014 $7.48
May2013 $8.55
May2012 $6.41
May2011 $4.57
May2010 $3.76
May2009 $0.31
May2008 $3.60
May2007 $6.48
May2006 $5.83
May2005 $4.72
May2004 $2.76
May2003 $2.74
May2002 $2.34
May2001 $1.99
May2000 $2.32
May1999 $2.10
May1998 $1.69

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $11.06
May2017 $7.72
May2016 $6.21
May2015 $6.08
May2014 $6.92
May2013 $6.00
May2012 $4.39
May2011 $3.50
May2010 $3.31
May2009 $3.45
May2008 $4.91
May2007 $5.21
May2006 $4.28
May2005 $3.30
May2004 $2.54
May2003 $2.38
May2002 $2.17

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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expeditors International of Washington Inc Valuation – March 2018 $EXPD

Company Profile (obtained from Marketwatch): Expeditors International of Washington, Inc. engages in the provision of global logistics services. It offers airfreight services, ocean freight and ocean services, and customs brokerage and other services. The firm also provides customer solutions such as order management, time-definite transportation, warehousing and distribution, temperature-controlled transit, cargo insurance, and customized logistics solutions. It operates through the following geographical segments: Americas; North Asia; South Asia; Europe; and Middle East, Africa, and India. The company was founded by Peter Rose, Wang Li Kou, Kevin Walsh, Hank Wong, George Ho, Robert Chiarito, and Glenn Alger in May 1979 and is headquartered in Seattle, WA.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPD – March 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $11,387,197,415 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.32 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 73.50% Pass
6. Moderate PEmg Ratio PEmg < 20 25.12 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 5.82 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.32 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.55
MG Growth Estimate 6.90%
MG Value $56.90
Opinion Overvalued
MG Grade B-
MG Value based on 3% Growth $36.98
MG Value based on 0% Growth $21.68
Market Implied Growth Rate 8.31%
Current Price $64.08
% of Intrinsic Value 112.61%

Expeditors International of Washington is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.75 in 2014 to an estimated $2.55 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 8.31% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Expeditors International of Washington revealed the company was trading above its Graham Number of $26.39. The company pays a dividend of $0.84 per share, for a yield of 1.3% Its PEmg (price over earnings per share – ModernGraham) was 25.12, which was below the industry average of 36.6, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $7.83.

Expeditors International of Washington performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $7.83
Graham Number $26.39
PEmg 25.12
Current Ratio 2.32
PB Ratio 5.82
Current Dividend $0.84
Dividend Yield 1.31%
Number of Consecutive Years of Dividend Growth 20

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Total Current Assets $2,541,452,000
Total Current Liabilities $1,093,119,000
Long-Term Debt $0
Total Assets $3,117,008,000
Intangible Assets $7,927,000
Total Liabilities $1,125,150,000
Shares Outstanding (Diluted Average) 180,811,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.74
Dec2017 $2.69
Dec2016 $2.36
Dec2015 $2.40
Dec2014 $1.92
Dec2013 $1.68
Dec2012 $1.57
Dec2011 $1.79
Dec2010 $1.59
Dec2009 $1.11
Dec2008 $1.37
Dec2007 $1.21
Dec2006 $1.06
Dec2005 $0.86
Dec2004 $0.59
Dec2003 $0.46
Dec2002 $0.44
Dec2001 $0.45
Dec2000 $0.38
Dec1999 $0.28
Dec1998 $0.22

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.55
Dec2017 $2.37
Dec2016 $2.14
Dec2015 $1.98
Dec2014 $1.75
Dec2013 $1.62
Dec2012 $1.56
Dec2011 $1.51
Dec2010 $1.33
Dec2009 $1.18
Dec2008 $1.15
Dec2007 $0.97
Dec2006 $0.79
Dec2005 $0.62
Dec2004 $0.49
Dec2003 $0.43
Dec2002 $0.39

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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

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