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Value

There are no signs (yet) of a recession from the transports. Old Dominion Freight Line, Inc. (ODFL - Snapshot Report) reported a record second quarter as revenue soared in the double digits. This Zacks #1 Rank (strong buy) is a value stock with a forward P/E of 13.6.

Old Dominion moves cargo and manages logistics, including ground and air expedited transportation, supply chain consulting, transportation management and warehousing services.

It also offers door-to-door international freight services through carrier relationships to and from North America, Central America, South America and the Far East.

Raised Base Rates By 4.9%

On Aug 22, Old Dominion announced it would raise its base rates by approximately 4.9% on Sep 6. The total impact on customers will be based on the lanes and distance their shipments move.

Similar increases will also be taken on Alaska, Hawaii, Puerto Rico, Caribbean, Canada and Mexico.

The company said the increase was necessary to offset he rising cost of new equipment, climbing insurance costs and providing competitive wages and benefits.

Old Dominion Beat For the 7th Straight Quarter

On July 28, Old Dominion reported its second quarter results and surprised on the Zacks Consensus Estimate by 25%. Earnings per share were a record 69 cents compared to the consensus of 55 cents. This was a 81.6% increase from the 38 cents it made in the year ago quarter.

Sales rose 30.4% to $480.3 million from $368.3 million last year.

Revenue increased 30.4% for the quarter to $480.3 million from $368.3 million for the second quarter of 2010. This was 15% above the previous record high of $417.8 million achieved in the second quarter of 2008, before the financial crisis.

The growth was due to a 14% increase in tonnage and a 14.2% increase in revenue per hundredweight compared to the second quarter of 2010.

Shipments also increased 16.8% and revenue per shipment rose 11.5% from a year ago.

Outlook Still Up for 2011

The company didn't provide EPS or revenue guidance but it did say it expects the strong growth of the second quarter to continue throughout 2011.

Old Dominion has increased its market share to the mid-single digits but sees opportunities for further organic growth, especially in its value-added logistics services which includes warehousing, truckload brokerage and fleet and transportation management.

Zacks Consensus Estimates Jump

After the record quarter, its not surprising that analysts raised full year guidance.

The 2011 Zacks Consensus Estimate rose to $2.21 from $1.98 in the last 30 days. This is earnings growth of 64% as the company made just $1.35 last year.

Fundamentals Are Solid

The recent market sell off has created an opportunity to buy Old Dominion shares much cheaper.

In addition to a P/E that is under 15, which is the cut-off I use for "value", the company also has a price-to-book ratio of 2.2. A P/B under 3.0 usually designates value.

Additionally, Old Dominion has a solid 1-year return on equity (ROE) of 15.2%.

As of the end of July, Old Dominion wasn't seeing a slowdown in its business. The company is attractively valued and is expected to see double digit earnings growth. It's a strong combination to be able to get both value and growth.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at twitter.com/traceyryniec.

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