Holding Landstar Following Earnings

Landstar System, Inc. (LSTR) reported revenue in the 2008 first quarter increased approximately 6 percent to $609 million compared to $577 million for the 2007 first quarter. Net income for the thirteen-week period ended March 29, 2008 was $23.7 million, or $0.45 per diluted share, compared to net income of $21.6 million, or $0.38 per diluted share, for the thirteen-week period ended March 31, 2007.

The midpoint of the $0.51 to $0.57 guidance range for the second quarter was ahead of the $0.53 consensus.

I have said before that I would be willing to own Landstar up to a parity yield with Treasuries, because I think the growth alone is sufficient premium for the risk. Based on the 2007 cash flows and the current yield on 5-year Treasuries, that implies a potential price of $84 - so its safe to say I don’t expect to sell any time soon.

Disclosure: At time of publication, William Trent owns shares of Landstar.