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Here's Why Knight-Swift (KNX) Jumps 45.7% in the Past 6 Months

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Shares of Knight-Swift Transportation Holdings (KNX - Free Report) have gained 45.7% in the past six months compared with its industry’s 43% increase.

Let’s look into the factors responsible for the upbeat price performance of this currently Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Knight-Swift is being aided by efficient cost-control measures and enhanced safety procedures. Evidently, total operating expenses declined 10.8% year over year in first-half 2020. We are also impressed by the company’s efforts to add shareholder value via dividends and buybacks. In February, the company’s board approved a 33.3% hike in its quarterly cash dividend to 8 cents per share (annually 32 cents). During the first six months of 2020, the company returned $27.7 million to its shareholders in the form of dividends and $34.6 million through share repurchases. Its free cash flow generation supports shareholder-friendly activities. The company generated free cash flow of $188.2 million in first-half 2020.

Its commentary that freight demand "gradually strengthened" throughout the June quarter is encouraging. We believe that owing to this improvement, the company reinstated its full-year  earnings guidance. It now expects adjusted earnings per share in the $2.15-$2.30 range, the midpoint being above the midpoint of the original projection of $2-$2.15, which was withdrawn during the March-quarter conference call due to coronavirus-led uncertainty. The Zacks Consensus Estimate for current-year earnings is pegged at $2.19.

Northward Estimate Revisions

Driven by the above-mentioned tailwinds, the Zacks Consensus Estimate for current-quarter earnings has been revised 31% upward in the past 60 days. Similarly, the Zacks Consensus Estimate for 2020 has increased 32.7% in the past 60 days.

Other Stocks to Consider

Investors interested in the same industry may also consider other top-ranked stocks including Landstar System (LSTR - Free Report) , ArcBest Corporation (ARCB - Free Report) and Werner Enterprises (WERN - Free Report) . While Landstar and ArcBest sport the same Zacks Rank as Knight-Swift, Werner carries a Zacks Rank #2 at present.

Shares of Landstar, ArcBest and Werner have rallied 34.6%, 68% and 40%, respectively, in the past six months.

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