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These 2 Trucking Stocks Seem Undervalued

A look at Knight-Swift Transportation and Schneider National

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Feb 28, 2022
Summary
  • These stocks have low price-earnings ratios.
  • They also have reasonably low price- book metrics.
  • The two companies pay dividends.
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Trucking stocks are not as glamorous and exciting as the disruptive innovation stocks, but they do have one advantage: they’re cheaper. That is, cheaper based on the classic valuation methods employed by

Warren Buffett (Trades, Portfolio) and others who’ve studied Benjamin Graham-style analysis.

If you’re more interested in basic value than in fabulous growth stories (a la

Catherine Wood (Trades, Portfolio)'s Ark Innovation Fund), then you might want to take a look at Knight-Swift Transportation Holdings Inc. (KNX, Financial) and at Schneider National Inc. (SNDR, Financial). You won’t hear them mentioned too often on CNBC or Fox Business, but that’s probably a good thing.

Knight-Swift Transportation (

KNX, Financial) trades with a price-earnings ratio of 12.24 and with a price-book value of 1.38. The Phoenix-based company has a market capitalization of $9.03 billion with an enterprise value of $10.73 billion. Price-sales is low at 1.45 and price-to-free cash flow is 14.71.

This year’s earnings per share are up by 85.10%. The growth rate of earnings per share over the past five years is 31%. Wall Street expects a slowing growth rate next year and then back to positive over the next five years. Knight-Swift’s shareholder equity is greater than its long-term debt and the current ratio is a positive 1.30.

The company is paying investors a dividend of 40 cents per share every quarter, coming to an annualized yield of 0.74%.

Average daily volume of Knight-Swift on the New York Stock Exchange is 1.42 million shares. The short float comes to 3.59%.

The GuruFocus financials summary for the company finds four good signs, two medium warning signs and three severe warnings signs:

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Schneider National (

SNDR, Financial), in business since 1935 with headquarters in Green Bay, Wisconsin, is trading with a price-earnings ratio of 11.35 and at a price-book ratio of 1.90. With a market capitalization of $4.60 billion, the company has an enterprise value of $4.57 billion.

The price-sales ratio is a low 0.80 and price-to-cash flow is also a relatively low metric at 9.63.

This year’s earnings per share are up by 91%. The earnings per share growth rate for the past five years is 20.30%. Schneider’s shareholder equity vastly exceeds the long-term debt on the books. The big trucking company pays its investors a quarterly dividend of 32 cents per share, which comes to an annualized yield of 1.24%.

Average daily volume is about 635,000 shares. The short float sits at 5.08%, which is not too high but still a figure worth considering. In early February, Wells Fargo analysts reiterated a rating of “equal weight” for Schneider stock. Also in early February, Morgan Stanley analysts reiterated their rating of the equity as “overweight.”

The GuruFocus summary of the company’s financials show eight good signs and two medium warnings signs:

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These types of value stocks are worth considering because, although nothing is guaranteed, they have a way of eventually being bought out or merged – or continuing to be money-making businesses.

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Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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