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Why Covenant Logistics (CVLG) Should Grace Your Portfolio

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Shares of Covenant Logistics Group (CVLG - Free Report) have surged 91.4% so far this year compared with the 34.6% appreciation of its industry.

Zacks Investment Research
Image Source: Zacks Investment Research

Let’s look into the factors that are working in favor of this currently Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today's Zacks #1 Rank stocks here.

Northward Earnings Estimates: The Zacks Consensus Estimate for current-quarter earnings has inched up 1% over the past 60 days. For 2021, the consensus mark for earnings has moved 7.9% north in the same time frame. The favorable estimate revisions reflect the confidence of brokers in the stock.

Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because the path of estimate revisions serves as an important pointer when it comes to ascertaining the stock price.

Impressive Revenue Growth: The Zacks Consensus Estimate for current-quarter revenues is pegged at $258.6 million, indicating a 22.7% rise from the year-ago quarter’s reported figure. Similarly, the consensus mark for current-year revenues stands at $994.7 million, implying a 18.2% increase from the prior-year reported figure.

Improving Freight Demand: Optimism surrounding the trucking industry is a positive for the stock. Betterment in the freight scenario as a result of growing economic activity led to a favorable environment surrounding the trucking industry. With the freight scene on the mend, revenue per truck per week is increasing. With an improved freight scenario, the company is benefiting from a strong performance of the Managed Freight segment. 

Other Stocks to Consider

Investors interestedin the broader Zacks Transportation  sector can also consider stocks like Saia, Inc. (SAIA - Free Report) ,Landstar System, Inc. (LSTR - Free Report) and TFI International Inc. (TFII - Free Report) . While Saia and Landstar carry a Zacks Rank of 2, TFI International sports a Zacks Rank #1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Saia, Landstar and TFI International is pegged at 29.9%, 12% and 31.6%, respectively.