Jensen: Companies That Make the World Run
Sep 25, 2012 | 06:00 AM EDT
2. The industry is very fragmented. This should allow this company to continue making strategic bolt on transactions. It recently took a small $25 million acquisition of an Omaha company that expands its capability to transport refrigerated product.
3. Earnings are growing at a solid clip. The company is on track to making $1.21 a share in 2012, a nice bump up from the $0.82 a share it made last year. Analysts have $1.45 a share in earnings projected for 2013.
4.The seven analysts that cover the stock have a $23-per-share median price target on the stock. Price targets are in a tight range of $22 to $24 a share. Echo Global Logistics (ECHO - Get Report) provides technology-enabled transportation and supply-chain management services in the U.S. It has a Web-based technology platform that compiles and analyzes data from its network of approximately 24,000 transportation providers. Here are four reasons Echo Global Logistics is undervalued at $17.50 a share: 1. The company is tracking to more than 25% revenue growth in 2012, and analysts expect another 20%-plus sales increase in 2013. The stock sports a five-year projected PEG of 0.83, under the 1.0 threshold.
2. Earnings are exploding at this fast-growing logistical-software firm. The company has grown EPS consistently and impressively over the past five years. It made $0.11 cents a share in 2007 and should book $0.70 in EPS this fiscal year.
3. The nine analysts who cover the stock have a median price target of $23 a share on Echo Global. Price targets range from $22 to $26 a share, all substantially above the current stock price.
4. The company has gone from a negative $5 million in operating cash flow in 2009 to the current level of more than $18 million in trailing OCF. It also has a cash-rich balance sheet, with almost $50 million in net cash on the books.
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