Keeping Pace With Intermodal Shipper Pacer International

Sep.28.07 | About: Pacer International, (PACR)

The transportation and logistics industries have tried to keep rolling along in 2007, even in a U.S. economy that continues to struggle at fending off the effects of the crumbling subprime mortgage market. Freight volumes are off, however, and many companies are operating with reduced expectations for 2007.

While the stocks of many companies in transportation and logistics have failed to gain much traction in recent months, including intermodal leader Pacer International (NASDAQ:PACR), it’s far from being a train wreck throughout the sector.

Based in Concord, Calif., Pacer International is a holding company that has dropped into the small-cap spectrum as its shares have lost value since February, pulling its market capitalization to around $665 million. With a gross revenue for 2006 of $1.9 billion, Pacer accounted for one-fifth of all intermodal container movement in North America and is also the largest provider of intermodal container services between the United States and Mexico.

Pacer operates in two segments: intermodal, which includes its double-decker Stacktrain and other rail services; and logistics, which provides services including warehousing and distribution. About 80% of its business comes from the intermodal segment, with the remainder coming from logistics.

For the past three years, Pacer was named to the Forbes Platinum 400 list, also called the “Best Big Companies in America.” Pacer, with a five-year total return of 15.6%, was among 17 transportation companies selected from the transportation sector for the list.