JB Hunt: Intermodel Gains
07/08/2014 7:00 am EST
There are some attractive looking stocks in the beleaguered trucking industry, where several companies have carved out special niches, suggests Tom Slee in Internet Wealth Builder.
Founded in 1961 with five trucks for hauling rice, JB Hunt Transportation Services (JBHT) is now a Fortune 500 company operating throughout the US, Canada, and Mexico.
The big story here is the intermodal division. Intermodal means shifting the same container by different forms of transport. This allows cargo to be moved seamlessly by transferring a container between trucks, trains, and ships. It's a complex process that is still being refined and JB Hunt is on the cutting edge.
Instead of meeting the railroads head on and competing for long distance haulage, the company has entered into partnership agreements with most of the leading rail carriers.
Hunt has gone even further, contracting with hundreds of major corporations to provide them with customized freight movement using systems and delivery services tailored to meet their particular requirements. Hunt has 87 last mile support locations.
My point is that JBHT is not a conventional trucking company. It is a dominant presence in intermodal and logistical services. The numbers are already impressive.
Looking ahead, significant investments by the railroads designed to broaden their intermodal markets should provide Hunt with the scope to generate well above average volume growth.
Earnings of about $3.15 a share are expected this year, compared to $2.87 in 2013, with a jump to the $4 range in 2015.
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