CH Robinson: Flexible But Freight Is Changing, Q3 Earnings Disappoint

Nov. 08, 2022 8:30 AM ETC.H. Robinson Worldwide, Inc. (CHRW)1 Comment
Mark Van Mater profile picture
Mark Van Mater
347 Followers

Summary

  • I rate CHRW as hold because I see better upside potential elsewhere.
  • Although the firm's variable-cost model provides flexibility, it is not immune to cyclical downturns when economic conditions deteriorate in this highly competitive market.
  • Spreads can rapidly narrow when customer pricing drops during economic slowdowns, and CHRW is locked into fixed contract rates with third-party carriers.
  • CHRW is a low-margin business and reported disappointing third-quarter results.
  • CHRW trends in EPS, P/E Ratio, Net Operating Margin, Interest Expense, and Debt per Share provide indications for stock price direction.

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Investment Thesis

CH Robinson Worldwide (NASDAQ:CHRW) has some strengths but does not have enough potential upside for me. They reported disappointing third-quarter results and may see further deterioration.

CH Robinson Worldwide

C.H. Robinson Worldwide, Inc. provides freight

Q3 Presentation

www.chrobinson.com/en-us/

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This article was written by

Mark Van Mater profile picture
347 Followers
I have 27 years' experience in sales and marketing where my strength was always research and analysis.  I now have 12 years' experience as a full-time investor and independent research analyst. My primary focus is on value stocks showing strong growth potential.  The 3-part strategy includes recognizing macro trends, seeking innovation and capitalizing on event overreaction. The process begins by running filters with 28 key criteria, then continues by considering over 120 data points on each investment. I listen to quarterly earnings reports and read 10Q reports. Fundamental Analysis is used to select stocks, and Technical Analysis plus Artificial Intelligence are used to identify the entry, trend, and exit points.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within 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.

Additional disclosure: CHRW has some strengths but does not have enough potential upside for me. They reported disappointing third-quarter results and may see further deterioration.

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