With rising estimates and good valuations RRTS is worth a look.

Company Description

Roadrunner Transportation Systems is a transportation and logistics company with offerings ranging from domestic less-than-truckload services to international air.

Record Earnings

On Aug 3 Roadrunner reported a record high for operating income and earnings per share. Revenues were up over 30% due several factors, most importantly was new customer growth.

The company said it wasn't expecting economic conditions to pick up but it's strategies should still lead to growth in the near future. A cautious, realistic management team is a good asset in a turbulent market.

Earnings per share came in a penny better than the Zacks Consensus Estimate, at $0.24 and gave them back-to-back earnings surprises.

New Acquisition

In late august the company finished a deal to buy Prime Logistics for $98 million. About $3 million in stock and the rest was cash obtained by expanding an existing credit facility.

Prime expands the Roadrunner's non-asset logistic and freight consolidation offerings.

Rising Estimates

Since the earnings surprise the full-year Zacks Consensus Estimate for this year is up 4 cents, to $0.87. Next year's average forecast is up 17 cents, to $1.19. Last year Road Runner earned $0.53 per share so the projected growth rates are now 63% and 37%, respectively.

Trading at a Discount

Despite a spike in share price on the earnings release, you can still get shares at a nice value. RRTS is going for about 17 times forward earnings, which puts the PEG at 1.2 times. But, the P/S of 0.65 and P/B at 1.6 are showing deeper value that the earnings multiples.

The Chart

Freight stocks are very susceptible to the macro-economic view so this does carry a good amount of risk. But, with the valuations and rising estimates this Zacks #1 Rank (Strong Buy) might be worth a shot here.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service