Whopper Investments
Deep value, special situations, event-driven, arbitrage

Substantial Upside As USA Truck's Turnaround Trucks On

Last Friday, USA Truck (NASDAQ:USAK) shares sold off almost 10% after 13-D holder Knight Transportation (NYSE:KNX) sold 110k shares, or almost 10% of their position. As this article will show, I believe the sell-off was unwarranted and an investment in USAK offers substantial upside with strong near-term catalysts.

Background

USA Truck has two segments: trucking (68% of Q1 revenues) and SCS (32% of Q1 revenues). Trucking offers, well, trucking services to companies looking to ship goods, and SCS offers freight brokerage services and rail intermodal services. SCS basically is outsourced freight management: a client tells SCS they need to get some freight from point A to point B, and SCS finds trucking capacity, either with their

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