A More Balanced Kirby Can Offer More Upside From Here

The past year has been a challenging one for Kirby (KEX), but I believe there is still value in the business and the shares. Although Kirby's core marine business is still seeing some difficult market conditions, management's decision to diversify further into engine/equipment servicing and construction is paying dividends with the recovery in the U.S. onshore energy market. What's more, management has been acting responsibly in its marine business, retiring older capacity, and recently committing to acquire a sizable fleet of newer assets.

The shares have climbed about 25% since my last update, but I see more value on the basis of good demand in the D&S business and recovery prospects in the marine operations. Conditions in the inland market are already getting better, but a coastal recovery is likely a 2019 driver. With mid-single-digit revenue growth and FCF margins moving toward the double-digits, KEX shares should be able to produce total annual returns in the high single-digits to low double-digits from here.

Click here to continue:
A More Balanced Kirby Can Offer More Upside From Here