And right now, trucking is pointing downward. Still there are plenty of buy-worthy stocks in the trucking industry.
The stocks on this list are all rated "buy" with an A- or better rating. Check out which trucking industry stocks are good buys right now. And when you're done, be sure to read which retailer stocks are good buys.
TheStreet Ratings, TheStreet's proprietary ratings tool, projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.
Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.
Note: Year-to-date returns are based on May 14, 2015 closing prices.
KNX data by YCharts
6. Knight Transportation Inc. (KNX)
Market Cap: $2.5 billion
Rating: Buy, A-
Year-to-date return: -11.2%
Knight Transportation, Inc., together with its subsidiaries, operates as a short-to-medium haul truckload carrier of general commodities primarily in the United States. It operates through two segments, Trucking and Logistics.
"We rate KNIGHT TRANSPORTATION INC (KNX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 16.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- KNX's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, KNX has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
- KNIGHT TRANSPORTATION INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KNIGHT TRANSPORTATION INC increased its bottom line by earning $1.25 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $1.25).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 55.1% when compared to the same quarter one year prior, rising from $19.06 million to $29.56 million.
- Powered by its strong earnings growth of 56.52% and other important driving factors, this stock has surged by 28.63% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: KNX Ratings Report