Jensen: Don't Pass These Truckers By
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The market is currently at multiyear highs. The rally was turbocharged last week by the latest actions by the Federal Reserve, which boosted the overall market, especially pushing cyclical and commodity stocks much higher. As a result, finding value is getting much harder than it was a few months ago.
- It is hard to find a cheaper stock than Arkansas Best. It sells for just 47% of book value and approximately 10% of annual revenues.
- The company is expected to post a small overall loss in 2012, but analysts expect it to bounce back and post $1 in earnings per share on a double-digit revenue increase in 2013.
- The company recently successfully pushed through an almost 7% price hike. In addition, ABFS is selling at less than 4x operating cash flow.
- The stock is selling at the very bottom of its five-year valuation range based on price-to-earnings, price-to-book and price-to-sales ratios. The mean price target of the 10 analysts that cover the stock is slightly above $15. Standard & Poor's has a Buy rating and $20 price target on ABFS.
- The 15 analysts that cover the stock have a median price target of $12 a share. Targets range between $10 and $16 a share.
- The stock is selling for less than 8x forward earnings and just 3x operating cash flow. The company also has been able to triple OCF over the past three years.
- Analysts expect between 4% and 5% revenue growth for both 2012 and 2013. SWFT sports a five-year projected price/earnings/growth ratio of under 1 (0.56) and the stock is just above the level insiders made new purchases in 2011 and this year.
- The stock has formed nice intermediate technical support around the $8 level (see chart).
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