Entering text into the input field will update the search result below

C.H. Robinson: Ride It Higher


  • C.H. Robinson shares are trading at a 27% discount to the overall market.
  • The company's cash hoard represents 50% of outstanding debt - very strong balance sheet.
  • Assuming that company will continue to grow dividend at a rate of 6% per year, our growth model shows a 7.5% return on the shares to 2020.
  • Our upward target price of $73.00.

I will admit that it's easy for me to have a positive bias where C.H. Robinson Worldwide (NASDAQ:CHRW) is concerned, given that my options on the stock made me a 32% return in January. Although the shares are down about 5% over the past year, I think it is time to return to the well and look into this company again. In my view, the fact that shares are down about 5% over the past year creates a buying opportunity for investors. I'll go through my reasoning by reviewing the financial history of the firm. I'll also predict what is a reasonable return in light of likely dividend increases going forward. I'll conclude with a short discussion about the stock relative to the overall market.

Financial Snapshot

It's difficult for me to find much to dislike about the financial history of C.H. Robinson. The firm has grown revenues at a consistent pace (CAGR of about 5.7% since 2011). Net income has been slightly more choppy, but it has grown at a CAGR of about 3% since 2011. At the same time, EPS has grown at a CAGR of about 5.4% as a result of an aggressive share buyback program.

I also think that management's actions have been exemplary here, in light of the fact that they have returned approximately $3.2 billion to shareholders over the past six years ($1.8 billion in stock buybacks, the balance in dividends). This is critical, in my view, because all businesses are affected to some extent by the business cycle. What matters is what management does about that innate volatility. In my view, company management has proven itself very shareholder-friendly by its actions over the past six years.

In addition, the balance sheet is in relatively good shape, in my view. In particular, debt is not a major issue

This article was written by

ChartMasterPro profile picture
Options trading ideas for those who want to add leverage to their portfolio

ChartMasterPro is a trading service which focuses both on the fundamental and technical analysis of stocks and equity markets. I use a proprietary trading model to trade Call and Put Options on US equities. I've been trading options for 15 years and have made all the trading mistakes that could possibly be made, but as Winston Churchill once said: "Success is the ability to go from one failure to another with no loss of enthusiasm." And by the way, the name is John, John DiCecco. I'm excited to announce that I now offer a MarketPlace service in partnership with SeekingAlpha called The Options Trader - if you like trading options, check it out.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in CHRW 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.

We trade options. Sometimes our trades last a few days, sometimes a few weeks, sometimes a few months. Please review our trade history listed in our Seeking Alpha Instablog posts to get a feel for our trading style.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.