Kirby Reaping The Benefits Of A Tighter Market

Healthy demand for petrochemicals and a more rational supply situation has benefited Kirby (NYSE:KEX), with the combination of strong refinery capacity utilization and limited new supply driving good utilization and much higher day rates for the company’s barge fleet. At the same time, increased demand for engine and transmission maintenance and overhaul from trucking, power gen, and oil/gas has helped the Distribution & Services (or DES) business perform better.

These shares are up about 3% since my last update; not a great performance, but not bad relative to the average industrial or transportation company (Kirby doesn’t have any good direct comps), and Kirby has actually outperformed oil since that last update (Kirby shares and oil often trade together, given Kirby’s reliance on oil and oil-based refined products). While I do see some clouds on the horizon with the economy, the valuation is still reasonable for a company that has in the past enjoyed a robust premium.

 

Read the full article here: 

Kirby Reaping The Benefits Of A Tighter Market

Anchors Aweigh For Kirby, As Chemical And Refinery Activity Drives More Barging Demand

It has taken a little longer than I expected, but Kirby (NYSE:KEX) is finally seeing operating conditions in its core inland barge business improve to a meaningful extent. A strong economy and limited new barge capacity should make for a much more profitable operating environment for at least the next two or three years, while the long-suffering Distribution & Services business benefits from increased power generation, trucking, and energy sector demand.

These shares are up about 12% since my last update, beating both the S&P 500 and the Dow Jones Transportation Index over that time – neither of which are great proxies for this company, but you have to take what you can get sometimes. With the stock off sharply since the announcement of an agreement to supply barges for an offshore wind project, this seems like a good time to revisit the name.

 

Read the full article here: 

Anchors Aweigh For Kirby, As Chemical And Refinery Activity Drives More Barging Demand

Kirby Looking More Interesting After Some Recent Underperformance

 

Barge-operator Kirby (KEX) has its own sector- and company-specific drivers, but the shares have long tracked overall trends in transportation (like the Dow Jones Transportation Average), and like that index, the shares have been weak since May on various and sundry concerns about whether the recovery has already peaked and whether the resurgence in COVID-19 cases will once again slow the economy.

Down about 12% since my last article, when I thought the valuation was looking pretty full, I’m more interested in these shares today. I do have some longer-term concerns about demand in the barge market and what it implies for pricing and margin, but in the shorter term, increased refinery utilization and increased demand for gasoline and jet fuel (among other products) should drive improving utilization, rates, and margins in the inland marine business, and the slimmed-down Distribution and Services could outperform against no-to-low expectations.

I can see an argument for Kirby shares trading to $70 in the short term, which it makes worth considering today.

 

Read more here: 

Kirby Looking More Interesting After Some Recent Underperformance

Kirby's Business Needs A Little More Time, But The Stock Has Recovered

Conditions in the refining and chemical industries aren't fully back to normal, but they're trending back in that direction, with the ongoing economic recovery driving higher prices and improving capacity utilization. It's not "business as usual" again yet for Kirby (KEX), but the worst of the downturn is well behind the company and the second half of 2021 should see a more meaningful recovery.

As is usually the case, the share price has moved ahead of the reported numbers, with the shares up about 65% since my last article despite a couple more soft quarters. At this point, Kirby valuation hasn't fully gone back to pre-pandemic norms, but I expect that as soon as the company returns to beat-and-raise quarters, the sell-side will find reasons to stretch out the multiples to support higher price targets.

 

Follow the link to the full article: 

Kirby's Business Needs A Little More Time, But The Stock Has Recovered

The Value Of Kirby's Marine Business Is Being Submerged By Weak Results From DES

Kirby (KEX) has been through tough times before - the economically-sensitive nature of the petrochemical products it transports basically guarantees that - but this sudden downturn is being exacerbated by the company's decisions in past years to diversify into engines and industrial parts, particularly in the oil/gas space. While the marine business remains comfortably profitable, and with a large share in the industry, the distribution and services business (or DES) seems to keep finding new legs down.

While I did flag the risk that things would get worse before they got better, the 20% or so additional drop in Kirby's share price was more than I expected. Some of that can be attributed to weaker demand in Marine, but I think the weak outlook for the DES business may be having a bigger impact. In any case, these shares do look undervalued on cash flow and EV/EBITDA, and I believe the shares trade below the tangible book value of the Marine assets, making this a name for patient investors to consider.

 

Follow this link to the full article: 

The Value Of Kirby's Marine Business Is Being Submerged By Weak Results From DES

Another Systemic Shock Creates Another Opportunity With Kirby

Barge operator Kirby (KEX) often trades at a robust premium during the good times; while the company’s historically strong operating margins and strong market share would support that to some extent, I’ve often thought that the valuation was just too rich in recent years – and the stock’s performance relative to the S&P 500 has been pretty poor over the last five years. Some of that can be tied to the company’s ill-fated expansion into fracking-related oil & gas machinery services, but some of it, I believe, is also tied to actual underlying free cash flow performance not being as robust as the valuation would other presuppose and the cyclicality of the business itself.

That may seem like a downbeat intro, but I actually think Kirby is a good company. The expansion into oil & gas within the Distribution and Services (or DES) business is an issue, but the core marine operations (inland and coastal barging) are about as solid as you could ask for, and I see little reason to believe that will change. Covid-19 has created some severe disruptions in the energy market, not to mention the economy as a whole, but I believe Kirby offers interesting long-term opportunity at this price.

Read more here:
Another Systemic Shock Creates Another Opportunity With Kirby

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.

Read more here:
Kirby's Core Business Back To Its High Tide

Kirby's Marine Business Recovers, But Energy And Valuation Are Challenges

I thought Kirby's (KEX) marine business was likely to improve when I last wrote about the company in August of 2018, but I also thought the valuation anticipated that. To that end, the shares are about 7% lower than the time of that last article, but there were some pretty significant swings in the meantime, as shares fell almost 30% to their December lows before a meaningful rally. During that period, Kirby's marine business has indeed showed ongoing signs of improvement and recovery, with improved utilization, pricing, and margins in the inland business, and a slower recovery in coastal, but a recovery all the same.

With shares having basically round-tripped in the interim, my feelings on valuation haven't changed that much. In the $70s (or below), this is a good name to consider for its strong position in inland petrochemical barging and the prospects for an improving mix in its diesel engine service business. At today's prices, though, I'm not quite so interested.

Click here for more:
Kirby's Marine Business Recovers, But Energy And Valuation Are Challenges

Healthy Petrochemical Markets Helping Kirby Recover

The inland barge market hasn't fully recovered yet, but it is definitely on its way back, and that has helped drive a good performance from Kirby's (KEX) shares. Between a recovering inland market, a bottoming coastal market, and healthy demand for energy equipment, Kirby should be looking at significantly improving EBITDA, earnings, and free cash flow over the next few years.

I thought Kirby's valuation looked a little full at the time of my last update, and the shares are down a bit since then, underperforming the Dow Jones Transports by about 10%. I do expect Kirby to benefit from ongoing strength in the economy in the short term as well as growing petrochemical production capacity in its core operating area over the medium term, and I do see mid-to-high single-digit annual return potential here, but slowdowns in Permian activity could have a bigger short-term impact on sentiment.

Click here for more:
Healthy Petrochemical Markets Helping Kirby Recover

Kirby's Recovery Prospects No Longer Undervalued

As the inland barge business seems to be bottoming out and the company's diesel engine business benefits from the oil/gas recovery and M&A-boosted scale, Kirby (KEX) shares have continued to perform well. Up another 10%-plus since my last write-up in February, it's harder to argue that the company's prospects are now undervalued. While I wouldn't rule out the possibility of further upward estimate revisions on a stronger inland barge recovery and/or even stronger growth in the diesel engine business, it looks like Kirby is back to a more typical valuation.

Read the full article here:
Kirby's Recovery Prospects No Longer Undervalued

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

Kirby Will See A Challenging 2017, But Better Days May Be Coming

Say what you will about Kirby (NYSE:KEX) and its historically robust valuation metrics, but the shares have at least held up despite operating conditions getting even worse and estimates heading down. Since my last update, the shares are more or less flat despite ongoing industry-wide weakness in barge utilization and pricing, and there may be some tentative signs of bottoming out in two of its key markets.

The Street has historically rewarded Kirby's significant scale and respectable operating history with rich multiples, but there could still be some upside here if 2017-2018 does indeed mark a low point in the cycle. Although Kirby doesn't have as much leverage to potential chemical capex expansion as you might hope, the company should nevertheless benefit from volume growth, while an expanded DES business seems poised to benefit from a recovery in U.S. onshore oil/gas activity.

Read all of the article here:
Kirby Will See A Challenging 2017, But Better Days May Be Coming

Kirby Trying To Move Through Treacherous Waters

I'm a little surprised that Kirby (NYSE:KEX) has held up as well as it has since my last update on the company. Down about 1% (though down as much as 30% at the depths of the January "we're all doomed!" market panic), Kirby has climbed back from the depths despite more of the guidance reductions and market deteriorations that kept me on the sidelines back in December of 2015.

I think it is still possible to argue for a fair value in the $70s, but investors are going to have to be patient and the market doesn't always (or even often) work that way. Significant capacity increases in U.S. chemical production capacity, concentrated along the Gulf Coast, should support higher demand for barging, as should demand for refined products. Crude oil, though, is not likely to be the positive influence it has been in the past, and that could complicate and delay the recovery. What's more, while it is always tempting to call a bottom, it can take a while for a business like Kirby's to move off of that bottom in a big way.

Click here to continue:
Kirby Trying To Move Through Treacherous Waters

Seeking Alpha: Kirby Tossed By The Crude Market

Persistently weak oil prices have continued to apply pressure to Kirby's (NYSE:KEX) valuation, as the shares are down more than 10% from my last update on this leading operator of tank barges. While Kirby's direct exposure to crude oil is relatively modest, the company can't escape the downstream consequences of less demand for crude oil transportation or the worries around a broader economic slowdown in the U.S. that would impact its petrochemical business.

Over the long term, Kirby should be fine. The large number of chemical plant expansions and newbuilds already underway should support future demand for inland barges, and the eventual expansion of domestic crude production should help both the inland and coastal businesses.

The question is how long "over the long term" takes to materialize. Pricing has softened in the inland business (with contracts renewing at prices down by the low-single digits) and there are plenty of examples of businesses/industries that have seen cyclical pullbacks go longer and deeper than expected. Kirby looks undervalued relative to its historical EV/EBITDA averages, but with three straight guidance cuts, it is hard to argue that the business has stabilized or found its bottom yet.

Continue here:
Kirby Tossed By The Crude Market

Seeking Alpha: Skidding Prices Have Brought Rare Sanity To Kirby's Valuation

Back in August, I reiterated what had become an all-too-familiar refrain for me in reference to leading barge operator Kirby Corporation (NYSE:KEX) - the company was a top-notch operator with strong share and a solid balance sheet, but the stock was just too expensive for my comfort. Since then, plunging oil prices and increased concerns about pricing and barge utilization, not to mention serious pressure in diesel engine services business, have more than a third of the stock's market cap away.

I still hesitate to call Kirby a clear-cut bargain. The shares are admittedly more in tune with historical valuation averages, but the market is still showing a willingness to pay more for Kirby's growth than it will pay for other transport companies. I'm not so bothered by this; I see no reason for "valuation equality" and I think companies that have established themselves as superior operators ought to get premium valuations and Kirby is one of those. So while hard-core value hounds may still balk at this price, and there certainly are reasons to worry that the shares could drop further before bottoming out, I think long-term investors who look to "buy the dip" on good companies ought to take a closer look here.

Read more here:
Skidding Prices Have Brought Rare Sanity To Kirby's Valuation

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.

Follow this link for more:
Petrochemical Transportation Pain Is Kirby's Gain

Seeking Alpha: Growing Crude And Petrochemical Production Boosting Kirby

Plenty has been written about the significant increases in crude oil production in the U.S. brought about by exploiting unconventional shales like Eagle Ford, Niobrara, and Bakken. Likewise, there has been ample attention given to the increasing production of petrochemicals in the U.S. by virtue of improved access to oil, natural gas, and natural gas liquids.

Kirby (KEX) is a lesser-known beneficiary of these trends. The company is easily the largest operator in both the inland barge and coastal barge markets, with more than 23 million barrels of capacity in its fleet. As volumes increase and pipeline capacity becomes more of an issue, Kirby has a rare opportunity to benefit from strong utilization and pricing. Valuation on these shares does appear pretty heady, but is likely sustainable so long as petrochemical demand remains solid.

Continue reading here:
Growing Crude And Petrochemical Production Boosting Kirby

Seeking Alpha: Kirby Looking At A Rising Tide Of Volume

Unless you live near a major river or coastal waterway, you may not give much thought to barges as a means of bulk transport, but it's a significant carriage option for agricultural and petrochemical products. With roughly 30% of the inland tank barge market and more than 20% of the coastal market, Kirby (KEX) not only has uncommonly high share, but is in a good position to benefit from the ongoing growth in U.S. oil and gas production, as well as the billions of dollars of new petrochemical capacity coming online. While these shares are seldom cheap, waiting for a significant pullback can be a frustrating exercise.

Read more here:
Kirby Looking At A Rising Tide Of Volume

Investopedia: Rails Seem To Point To A Respectable 2013

Many analysts and investors have worried about the outlook for growth in the United States in 2013, but railroad data continues to suggest an ongoing recovery/expansion in the economy. Although it's true that the rails have enjoyed an uncommonly long stretch of good performance relative to the markets, ongoing demand growth could continue to support the sector.

December's Data Looks Very Familiar
The Association of American Railroads reported that U.S. rail carload volume declined about 4% for the month of December relative to the prior year, while climbing more than 2% from November's level.

As has been the case for quite some time, coal and grain traffic declines were a major negative influence on the results. Coal volume declined by more than 13%, while export declines tied to this year's drought helped fuel a 14% decline in grain carload traffic. Excluding coal, carload traffic was up more than 3%, while traffic excluding coal and grain climbed 6%.

Please continue here:
http://www.investopedia.com/stock-analysis/2013/Rails-Seem-To-Point-To-A-Respectable-2013-UNP-JBHT-KEX-BRK-A0108.aspx

Investopedia: Kirby Continues To Consolidate

I've always had a soft spot for unusual companies, and while operating barges and coastal cargo vessels may not be all that strange, it's not exactly a business sector rife with publicly-traded companies. Kirby (NYSE:KEX) has made M&A part of its DNA, and just executed another transaction - one that further consolidates the coast wise business and should improve the company's operating leverage. While Kirby is not really in value territory today, it remains a stock that value and GARP investors may want to keep on their radar.

To read the full article, please go to Investopedia:
http://www.investopedia.com/stock-analysis/2012/Kirby-Continues-To-Consolidate-KEX-XOM-DOW1130.aspx