Expeditors Speeds Towards Profits - Barron's

Expeditors International (EXPD) is a prime candidate to benefit from a global economy recovery, writes Barron's Dimitra Defotis, and could easily climb another 20% on top of its July gains.

Expeditors is a global leader in shipping logistics and provides additional services including inventory management, customs services and cargo insurance. Major customers include Cisco (CSCO), Wal-Mart (WMT), Toyota (TM) and a growing relationship with Nike (NKE).

As trade picks up, so should Expeditors business. It has a strong balance sheet, with $916M in cash and no debt, and a strong presence in the growing trade routes from China to Europe and the U.S. These factors should help Expeditors boost its share of the fragmented shipping market.

When demand improves, Expeditors will be able to handle the higher trade volumes right away; unlike many of its rivals, it has weathered the downturn without resorting to layoffs and heavy cutbacks. Historically, Expeditors's earnings have followed global economic growth, which is expected to reach 2.5% in 2010, and at least one analyst expects 17% annual earnings growth over the next decade. CEO Peter Rose expects a more conservative compound annual profit of 10-15%.

At a recent $33.06, the stock trades at around 26 times earnings estimates for FY 2010, below the company's ten-year average of 31 times forward earnings.

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

More to explore on Expeditors:

• In July, Barron's picked Expeditors as one of three S&P 500 stocks with the potential to be a winner, despite its high price.
• Richard Shaw thinks Expeditors has fundamental financial strength, and could be a good buy for risk-averse individual stock investors.