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Here's Why You Should Retain Kirby (KEX) in Portfolio Now
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Kirby Corporation (KEX - Free Report) is benefiting from favorable market conditions at the Marine Transportation unit. However, low liquidity is a concern.
Factors Favoring KEX
In first-quarter 2023, revenues in the Marine Transportation unit increased 16% year over year to $412.49 million. Segmental operating income jumped to $43 million in the reported quarter compared with $16.9 million in the year-ago period.
Operating margin improved to 10.4% compared with 4.8% in the year-ago period. Revenues in the inland (82% of the segmental revenues) increased 22% year over year owing to increased volumes, barge utilization, pricing, and fuel rebills. Average barge utilization in the coastal market (18% of marine transportation segmental revenues) in first quarter was in the mid-to-high 90% range.
Kirby’s cash flow generating ability is strong. In 2022, Kirby generated $121.5 million of cash from operating activities. For 2023, Kirby anticipates net cash generated from operating activities in the range of $480-$580 million, which is higher than 2022 figure.
Key Risks
Kirby’s liquidity position is a concern. Cash and cash equivalents of $26.69 million at the end of first-quarter 2023 was much lower than $1,079.64 million of long-term debt (inclusive of current portion). This implies that the company does not have enough cash to meet its debt burden.
Zacks Rank
KEX currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Triton International Limited .
Copa Holdings, which presently flaunts a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 862.5% and 84.14% surge, respectively, on a year-over-year basis.
Triton, which currently carries a Zacks Rank #2 (Buy), is benefiting from its consistent efforts to reward shareholders through dividends and share repurchases.
Triton has an impressive liquidity position. TRTN’s current ratio (a measure of liquidity) was 3.97 at the end of first-quarter 2023. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.
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Here's Why You Should Retain Kirby (KEX) in Portfolio Now
Kirby Corporation (KEX - Free Report) is benefiting from favorable market conditions at the Marine Transportation unit. However, low liquidity is a concern.
Factors Favoring KEX
In first-quarter 2023, revenues in the Marine Transportation unit increased 16% year over year to $412.49 million. Segmental operating income jumped to $43 million in the reported quarter compared with $16.9 million in the year-ago period.
Operating margin improved to 10.4% compared with 4.8% in the year-ago period. Revenues in the inland (82% of the segmental revenues) increased 22% year over year owing to increased volumes, barge utilization, pricing, and fuel rebills. Average barge utilization in the coastal market (18% of marine transportation segmental revenues) in first quarter was in the mid-to-high 90% range.
Kirby’s cash flow generating ability is strong. In 2022, Kirby generated $121.5 million of cash from operating activities. For 2023, Kirby anticipates net cash generated from operating activities in the range of $480-$580 million, which is higher than 2022 figure.
Key Risks
Kirby’s liquidity position is a concern. Cash and cash equivalents of $26.69 million at the end of first-quarter 2023 was much lower than $1,079.64 million of long-term debt (inclusive of current portion). This implies that the company does not have enough cash to meet its debt burden.
Zacks Rank
KEX currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Triton International Limited .
Copa Holdings, which presently flaunts a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 862.5% and 84.14% surge, respectively, on a year-over-year basis.
Triton, which currently carries a Zacks Rank #2 (Buy), is benefiting from its consistent efforts to reward shareholders through dividends and share repurchases.
Triton has an impressive liquidity position. TRTN’s current ratio (a measure of liquidity) was 3.97 at the end of first-quarter 2023. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.