Expeditors International Bulls Are Becoming Needlessly Restless

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

HEARD ON THE STREET: Logistics Company Offers Long-Range Appeal

• Summary: Shares of Expeditors International of Washington Inc. (EXPD) may be off their June highs by nearly 30%, but many Wall Street analysts see the logistics company's stock as a long-term investor's treasure. Says Joe Fath of T. Rowe Price: "The stock has been volatile lately, and that's probably an indication of its owners and not the company's results." Adds Ed Han, manager of the $143.9 million Transamerica Premier Growth Opportunities Fund, in which Expeditors was the top holding on June 30, "The market has become very short-term focused, and it can create an opportunity here for long-term investors." Bulls admit that recent pressure on the stock is understandable. The company's enviable profit-growth track record has translated into a perennially high price/earnings ratio, and stocks with rich per-share multiples often are sold first when investors get antsy. Today, the company's shares trade at a little more than 30 times expected earnings for 2007, which is almost double the P/E ratio of the average stock in the S&P 500 index. Not unexpectedly, 11 of 13 analysts who track Expeditors have dropped their rating of its shares to "Hold."
• Comment on related stocks/ETFs: See how EXPD stacks up against other shipping companies. Read more on comparative annual earnings growth of freight transportation stocks. Here's the bull case for EXPD as of six months ago.