Kirby's Core Business Back To Its High Tide

Kirby (KEX) is a story of two businesses right now, one very much back to the historically strong operating performance, and the other struggling to find a bottom amid a significant decline in onshore oil and gas equipment spending. Fortunately for Kirby shareholders, it’s the Marine business -- the business that has always driven value for the company -- that is doing well, while management looks to minimize losses in the Distribution and Services business for the time being.

Valuation has often been a challenge with Kirby. The shares have underperformed the market since my last write-up, but I did note in that last piece that readers might want to try to buy shares below $75. That opportunity came about a month later, and investors who bought below $75 are holding a decent 20% gain over a roughly four to five-month holding period. While Kirby’s Marine business is definitely doing well again, and returns of capital to shareholder could be on the horizon, I still have trouble making the valuation work below $75.

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Kirby's Core Business Back To Its High Tide