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Bull of the Day: Covenant Logistics Group (CVLG)

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Covenant Logistics Group (CVLG - Free Report) is a Zacks Rank #1 (Strong Buy) and it sports an A for Value and a B for Growth.  This company just posted a big beat and has seen a solid move higher.  Let’s explore more about this company in this Bull of The Day article.

Description

Covenant Logistics Group Inc. offers a portfolio of transportation and logistics services, through its subsidiaries. The company services include asset-based expedited, dedicated and irregular route truckload capacity, as well as asset-light warehousing, transportation management and freight brokerage capability. Covenant Logistics Group Inc, is based in Chattanooga, Tennessee.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

For CVLG, I see four straight beats of the Zacks Consensus Estimate.  That is great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).

The average positive earnings surprise over the course of the last year works out to be 22%.

Earnings Estimates Revisions

The Zacks Rank tells us which stocks are seeing earnings estimates move higher. 

Over the last 60 days, earning estimates have moved up for CVLG.

This quarter has moved from $1.17 to $1.51.

Next quarter has increased from $0.79 to $0.94.

The full fiscal year 2022 has increased from $5.43 to $5.77.

Next fiscal year has seen the estimate move from $3.56 to $3.97.

Positive movement in earnings stock is a Zacks Rank #1 (Strong Buy).

Valuation

The valuation for this name quite low with a 6.5x forward earnings multiple.  The price to book is 1.5x which is well below the 3x level that value investors need to see. Price to sales comes in a 0.44x and has room to grow.  I see margins increasing in each of the last two quarters and with revenue growth slated to come in at 16%, this name looks very attractive.


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