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Low Liquidity Hurts Kirby (KEX) Amid Rising Segmental Revenues

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We have recently updated a report on Kirby Corporatiosn (KEX - Free Report) .

Kirby’s cost-management efforts are partly offsetting coronavirus-led adversities. Kirby's cash flow generating ability is also strong. In 2022, management expects cash flow from operations between $400 million and $480 million. The company aims to utilize this cash flow to reduce its debt load and pursue attractive acquisition opportunities.

In the distribution and services segment, revenues rose 26.5% to $240.7 million in fourth-quarter 2021 owing to improved performance in the oil and gas as well as commercial and industrial markets. Revenues in the marine transportation unit increased 17.1% year over year to $350.7 million during the fourth quarter, despite operations being still disrupted by COVID-19. In inland marine, within the marine transportation unit, Kirby expects favorable market conditions to continue in 2022, contributing to increased volumes from new petrochemical plants.

A decline in the current ratio (a measure of liquidity) might imply that the company cannot generate cash.

Zacks Rank & Stocks to Consider

Kirby currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Transportation sector are Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited (TRTN - Free Report) .

Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in all of the past four quarters.  Expeditors is being aided by the uptick in airfreight revenues. We are optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.

EXPD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term expected EPS (three to five years) growth rate for Old Dominion is pegged at 16%. Old Dominion is benefiting from strong performance in the LTL segment owing to improved freight conditions. In 2021, revenues in the LTL services segment increased 30.7% on a year-over-year basis.

Driven by the tailwinds, the stock has increased 28.7% in the past year.  ODFL currently carries a Zacks Rank #2 (Buy).

The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.

Driven by the tailwinds, the stock has increased 7.2% in the past year. TRTN currently carries a Zacks Rank #2.