National less-than-truckload (LTL) trucking company Arkansas Best (ABFS)
has been one of the best turnaround stories of 2013, as a new Teamsters
agreement with meaningful cost concessions gives the company a real
chance to repair one of the worst cost structures in the industry. With
that, the shares have rocketed up more than 200% this year, and 300%
from the 52-week low.
Even with that major leap, it would seem
that the company is not getting all its due. The shares trade at about
4.6x the current average EBITDA estimate for 2014, against a long-term
average of about 4.5x and industry averages that often run in the 6x to
8x range. On the other hand, Arkansas Best could still be facing
significant pension liabilities, and the company may find it difficult
to meet some aggressive growth goals. All told, I'm intrigued by what
Arkansas Best could become again, but it's for me to not still prefer
the more richly-valued (but better-run) Old Dominion (ODFL).
Please continue here:
Expectations For Arkansas Best May Be Higher Than They Seem
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