Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Covenant Logistics Group's Sloan Ratio %
For the Trucking subindustry, Covenant Logistics Group's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Covenant Logistics Group's Sloan Ratio % Distribution in the Transportation Industry
For the Transportation industry and Industrials sector, Covenant Logistics Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Covenant Logistics Group's Sloan Ratio % falls into.
Covenant Logistics Group Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Covenant Logistics Group's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Covenant Logistics Group's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 16.635 (Mar. 2023 ) + 12.293 (Jun. 2023 ) + 13.506 (Sep. 2023 ) + 12.795 (Dec. 2023 ) = $55 Mil.
Covenant Logistics Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 7.248 (Mar. 2023 ) + 5.12 (Jun. 2023 ) + 40.605 (Sep. 2023 ) + 31.868 (Dec. 2023 ) = $85 Mil.
Covenant Logistics Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 7.078 (Mar. 2023 ) + -120.407 (Jun. 2023 ) + -31.266 (Sep. 2023 ) + -91.326 (Dec. 2023 ) = $-236 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Covenant Logistics Group (NAS:CVLG) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Dec. 2023, Covenant Logistics Group has a Sloan Ratio of 21.62%, indicating there is a warning stage of accrual build up.
Covenant Logistics Group Sloan Ratio % Related Terms
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Covenant Logistics Group (Covenant Logistics Group) Business Description
Covenant Logistics Group Inc together with its wholly-owned subsidiaries offers truckload transportation and freight brokerage services to customers throughout the continental United States. The company's reportable segments include Expedited, Dedicated Services, Managed Freight and Warehousing. Expedited segment provides truckload services to customers with high service freight and delivery standards. Dedicated segment provides customers with committed truckload capacity over contracted periods with the goal of three to five years in length. Managed Freight segment includes brokerage services and TMS. Warehousing segment provides day-to-day warehouse management services to customers who have chosen to outsource this function. Majority of revenue is generated from expedited segment.
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