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Bear Of The Day: Saia (SAIA)

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Saia (SAIA - Free Report) is a Zacks Rank #5 (Strong Sell) after the company missed the Zacks Consensus Estimate when the company last reported. Trucking companies have been hurt by the consistently higher interest rates and the tariff tantrum that has disrupted the supply chain.  This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.

Description                       

Saia, Inc. operates as a transportation company. It provides regional and interregional less-than-truckload (LTL) services. The firm offers full value coverage, logistics services, distribution and consolidation, trade show, customs clearance, retail delivery, cross border shipping to Mexico and Canada, and offshore shipping to Alaska, Hawaii and Puerto Rico. The company was founded by Louis Saia, Sr. in 1924 and is headquartered in Johns Creek, GA.

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.

In the case of Saia (SAIA - Free Report) I see the company has missed the Zacks Consensus Estimate in three of the last four quarters.  This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.

The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.

Earnings Estimates

The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower.  For Saia (SAIA - Free Report)  I see annual estimates moving lower of late.

The current fiscal year consensus number moved lower from $15.47 to $9.74 over the last 60 days. 

The next year has moved from $18.83 to $12.69 over the last 60 days.

Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).

It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions.  That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).


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