J.B. Hunt Transport Keeps On Truckin'

| About: J.B. Hunt (JBHT)

J.B. Hunt Transport Services (NASDAQ:JBHT) is a basic industry stock that has the double-digit growth projections I like to see. The trucking industry is vital to our economy and a transportation company that combines freight by both road and rail through its intermodal franchise is a plus.

During the past 2 1/2 months while the market as measured by the Value Line Index has been flat shares of J.B. Hunt are up 14%:

The company offers a full range of transportation solutions on both leased and company owned facilities and its operations cover the U.S., Canada and Mexico.

Factors to consider:

Technical factors:

  • 88% Barchart technical buy signal
  • Trend Spotter buy signal
  • Above its 20-, 50- and 100-day moving averages
  • 4 new highs and up 3.32% in the last month
  • Relative Strength Index 68.34%
  • Barchart computes a technical support level at 57.90
  • Recently traded at 60.29 with a 50-day moving average of 55.09

Fundamental factors:

  • 22 Wall Street brokerage firms assigned 30 analysts to make recommendations to their clients
  • Revenue is projected to increase by 11.50% this year and another 10.50% next year
  • Earnings are estimated to increase by 22.30% this year, an additional 16.30% next year and continue to increase annually at the rate of 19.47% for the next 5 years
  • The 23.46 P/E ratio is not out of line in a 15.2 P/E market
  • The dividend rate of 1% is about 20% of predicted earnings
  • The company is increasing market share in both its rail and road transport segments
  • The company has a B++ financial strength rating

Investor interest:

  • Wall Street analysts have made 7 strong buy, 7 buy, 15 hold and one under perform recommendations to their clients
  • 202 individual investors on Motley Fool have voted the stock a 76% chance of beating the market
  • Short interest is rapidly dropping from about 1.4 million shares in the middle of last month to around 800K shares recently.

Peer comparisons:

Always compare your stock to price movement of its competitors. During the past year JBHT was up 41% while Old Dominion (NASDAQ:ODFL) was up 32%, Con-Way (NYSE:CNW) was down 7% and Saia (NASDAQ:SAIA) was up 61%:

Conclusion: J. B. Hunt Transport Services is in a basic industry and has analysts forecasts of double-digit increases in both revenue and earnings. It is increasing market share in most of its segments and can be acquired for a reasonable P/E. This looks to be a solid investment in a solid company and will benefit greatly as the economy recovers. As always monitor the moving averages and turtle channels to sense market weaknesses:

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in JBHT over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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