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Bull of the Day: Knight-Swift (KNX)

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I suppose it’s tough to step up here and give a Bull of the Day when it feels like the entire world is collapsing around it. But like all rough days in the market, this too shall pass. Whenever the market turns around and gets back to the business of pushing up to new highs, here’s a stock which should be ready for the next leg higher. It’s in the trucking industry which has done very well in the wake of tax cuts.

I’m talking about Zacks Rank #1 (Strong Buy) Knight-Swift Transportation (KNX - Free Report) .Knight-Swift Transportation Holdings Inc., together with its subsidiaries, provides truckload transportation and logistics services in the United States, Canada, and Mexico. It operates through two segments, Trucking and Logistics. The Trucking segment offers dry van truckload, temperature-controlled truckload, and drayage services between ocean ports, rail ramps, and shipping docks. As of March 31, 2017, it operated an average of 4,674 tractors, of which 4,174 were company-owned tractors; and an average of 12,444 trailers. This segment transports various types of freight, principally consumer staples, retail, paper products, packaging/plastics, manufacturing, and import/export commodities. The Logistics segment provides logistics, freight management, freight brokerage, and rail intermodal services, as well as other non-trucking services, such as used equipment sales and leasing to independent contractors and third-parties. 

Analysts have seen a bullish streak evolve here in KNX. Over the last thirty days, eight analysts have increased their earnings estimates for the current year while five have done so for next year. The bullish attitude has jacked up our Zacks Consensus Estimate for the current year from $1.75 to $2.24, while next year’s number has jumped from $2.15 to $2.73. That dramatic increase was enough to justify higher prices for the stock.

Following its last earnings report, shares gapped up from under $46 to near $52. Since the short-term volatility has hit the market, KNX has unwound, coming back fill that gap. Today’s action saw the stock close at $47.36. The good news for investors is that the 50-day is still below the current price at $44.86. This confirms the bullish trend KNX is in right now. If the market can right itself, this could be one of the stocks storming higher along with it.

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