Thursday, August 7, 2014

Seeking Alpha: Petrochemical Transportation Pain Is Kirby's Gain

Kirby (NYSE:KEX), the largest U.S. tank barge operator in the U.S., continues to be a frustrating proposition for value-oriented investors. I've never seen a cogent argument against the idea that Kirby is looking at many years of strong demand for its inland and coastal barging services, but the valuation has always looked steep relative to those growth prospects. That hasn't prevented the shares from climbing 37% over the last year or about 116% over the past two years, though, and the shares barely paused in the wake of a shipping accident involving a Kirby barge.

I like the prospects for expanding margins in both the marine operations and the diesel business, as well as for the company to leverage leading share and a strong balance sheet to grab profitable business as shale production and refinery expansions move forward. I just don't like what the market wants me to pay for that and I'll continue to watch Kirby from the sidelines.

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Petrochemical Transportation Pain Is Kirby's Gain

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