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Landstar System Inc (LSTR)
know UPS loves
logistics. Like UPS, Landstar is a supply chain,
transportation expert for all sorts of commercial needs. In
contrast to UPS, Landstar integrates a
vast network of third party freight movers and systems to get parcels
point A to point B quicker, smarter and hopefully cheaper than their
growing companies that need to
move more of their goods around the world, LSTR provides solutions to
customers’ logistical needs via air, rail, road and sea. They
can ship, store, track, economize and
manage the entire supply chain from beginning to end.
world that wants instant
gratification, quick delivery and full automation. Shipping
companies like LSTR may have a very
bright future. Their stock is up 44% since October and could regain
here if their positive earnings trajectory continues.
Company Description &
is a transportation and logistics company that
provides solutions from individual shipments all the way up to managing
enterprise shipping and logistical needs.
The bulk of their business is focused in the United States, Canada and
Mexico with a moderate amount of global exposure. They also
offer insurance thorough Signature
Insurance Company, a wholly owned offshore insurance subsidiary, as
Risk Management Claim Services, Inc.
to the Cass Freight Index,
shipments have not been that strong over the past couple months, but
managed to report strong results back on January 31st. Below
is an expert from the report.
over year, total freight
expenditures were up 22.1%, but that comparison was misleading. Thanks
weather last year, January 2011 was the lowest point the Index reached
past 18 months. Freight expenditures have leveled off in
recent months as the reduced shipment
volume took pressure off capacity and rates stabilized, note Cass
Total freight spend has been relatively flat during the last several
mirroring shipment volume, indicating that the rate increases that were
prevalent for most of 2011 have slowed, too.
thinking here is that LSTR was
able to deliver strong results even in a tough economic climate that is
supposedly improving. If you look at
peers like UPS, you will find indications that shipping demand is on
and this should translate into profits for Landstar. Keep in
mind that UPS was seeing most
strength in small packages and has more of a global
Fedex also saw increasing volume as well in
the last quarter as did several of Landstar’s competitors.
Landstar is a smaller mid-cap (2.56 billion) company that is trading at
times trailing earnings (P/E). Looking forward, Zacks
are calling for that number to drop closer to 18 with no change in
the next year. Landstar became a Zacks Rank 1
strong buy on February 4th.
shipping company reported a
quarterly sales increase of 5% at their last earnings report.
sales were up 22% compared to Q42010 with total sales of roughly 183.25
in FY2011. LSTR earnings jumped from $1.77 in FY2010 to $2.39
for FY2011. Landstar is expected to earn $2.76 in FY2012
according to the Zacks Consensus Estimate.
Since LSTR reported earnings and offered guidance, we saw the majority
analysts raise estimates higher for the coming quarters as well as
FY2013 in the past month. Landstar will report Q22012 results
on April 19th.
are for Landstar to
generate $0.54 in income this quarter. Of the 17 analysts who
the consensus is for the company to grow earnings by 16% in the current
(FY2012) and roughly 13.5% in FY2013.
terms of the magnitude of analyst
estimate trends, we are seeing all of the consensus estimates higher
were 90 days ago for the current and next quarters as well as FY2012
beat estimates last quarter
by 60% and has managed to beat estimates for the past year by an
average of over
Market Performance &
Since the market lows of October 2011, Landstar has been a stable
stock, seeing its shares rise over 44% to a new 52 week high $53.00
less than a
week ago. For most of that move, LSTR
has been above its 50 day moving average, which can be used as clear
for the stock. That average currently
stands at $48.74. The 200 day moving average
sits below it at $44.99.
seems to be a bit of
consolidation around the $52 level as markets digest new economic and
data. Barring any major surprises, this consolidation
could provide a support foundation for the next leg higher in LSTR.
while the stock moves sideways,
the trend remains bullish and the momentum is intact. Watch
for any weakness in consumer or retail
spending data, which would most likely impact LSTR in a big way
negative). LSTR has exceeded the S&P
500’s performance by over 15% in the past year and just about 2.5% in
the past 3
months. With a Beta of .85, it’s a momentum stock that might
be a little
more manageable when it comes to volatility.
A Levy is the
Momentum Stock Strategist for Zacks.com. He is also the Editor in
charge of the
Whisper Trader Service.