I've been getting more interested in transports lately, including truckload carriers like Heartland (HTLD), Knight-Swift (KNX), and Werner Enterprises, Inc. (NASDAQ:WERN), as the market seems to be pricing in a fairly steep decline off of an approaching peak in rates (likely late Q1/early Q2) despite a fair bit of evidence that the market will see a shallower correction. While buying into cyclical declines is always risky, the prospect of interesting long-term values makes the sector worth another look.
Specific to Werner, I do have some concerns about the cost of the company's growth plans (namely, capex spending weighing on DCF-based valuation) and whether the company can hit some bold growth targets, but I like the more defensive trucking mix here and the opportunity to grow value-added businesses like last-mile service. With an apparent fair value above $50, this is another name in this sector to consider.
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Werner Enterprises Looking To Accelerate Growth As Rates Approach A Cyclical Peak
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