Report NEW YORK, Feb. 29 /PRNewswire/ -- Thom Albrecht, Vice President with ABN AMRO, Paul Jeanne, Equity Analyst with Deutsche Banc Alex.Brown, and Jeffrey Kauffman, First Vice President with Merrill Lynch, examine the outlook for the Trucking Industry in this timely and deeply informative 14,500-word roundtable discussion from The Wall Street Transcript (212-952-7433) or http://www.twst.com/info55.htm In a vital review of this evolving sector for investors and industry professionals, this Trucking Industry Report features an in-depth analysis of the Trucking Industry sector by leading experts Thom Albrecht, Vice President with ABN AMRO, Paul Jeanne, Equity Analyst with Deutsche Banc Alex. Brown, and Jeffrey Kauffman, First Vice President with Merrill Lynch & Co. Albrecht, Jeanne, and Kauffman discuss the outlook for the trucking industry, including the favorable conjuncture for the trucking companies and offer their current stock recommendations. On the truckload side, Kauffman states: "The interesting stock to us there is J.B. Hunt (Nasdaq:JBHT), which is a stock that a lot of people kind of left for dead. Hunt is kind of a different character in truckload. They are not really a pure truckload company. They have a large investment in intermodal containers and they have some dedicated logistics businesses that are growing very, very fast and improving profitability. They are heavily contingent upon rail service, and when rail service is bad, it kills earnings. But when rail service was good a few years ago, Hunt's earnings grew dramatically. This is a carrier that could conceivably double or triple its earnings over the next two to three years, if rail service turns around. I don't know of another truckload carrier that is capable of doing that right now. Albrecht states, "Covenant (Nasdaq: CVTI) is a $13 stock that just finished 1999 with $1.48 a share in EPS. CVTI has consistently demonstrated the best pricing power in the business as freight rates have been raised a minimum of 2% a year for four consecutive years. Covenant also markets its services as an alternative to airfreight shippers. With Covenant's team service, much of the country can be serviced with two-day deliveries, which is the fastest growing product for airfreight companies. In fact, team truck service means that roughly 1,000 miles can be covered overnight. Yet compared to true airfreight rates, Covenant's rates are often 50% to 80% cheaper, yet just as reliable." Albrecht continues, "In summary, we like the niche markets Covenant competes within. Eagle Airfreight (Nasdaq: EAGL), a freight forwarder I am recommending, is Covenant's largest customer. Eagle is an airfreight forwarder that has sold ground services as an alternative to domestic airfreight shippers, so these two companies have been excellent partners in one another's success." About M.S. Carriers (Nasdaq: MSCA), Jeanne says "the story over the last couple of years is that they have made a number of operational and structural changes that have improved both productivity and earnings visibility. The company has also made a couple of acquisitions and now has the critical mass and geographic coverage necessary to compete for large core carrier bids and dedicated fleet business." Jeanne concludes with Knight Transportation (Nasdaq: KNGT) and Heartland Express (Nasdaq: HTLD) as he explains: "Over the last year or so, each has struggled a little bit, with drivers and top-line growth. Both have recently made changes to their driver programs that have allowed them to reaccelerate growth. Knight has had some success bringing drivers in through its driver school, while Heartland has addressed the issue largely through a driver pay increase. What's interesting about both of them is that if competition for drivers creates a pay war, these are the two carriers in the truckload group that are in the best position to withstand it. They have the highest margins in the business and are essentially debt free. Both are buy rated and should perform well in the coming year." About Forward Air (Nasdaq: FWRD), Albrecht states: "Forward Air, unlike most transportation companies, continues to expand its margins and generates tremendous financial returns. For example, its return on capital is over 30% while its return on equity exceeds 40%. With its large owner-operator base, FWRD has little exposure to higher fuel costs. Forward Air is the trucking/airfreight play investors would be wise to consider." To obtain a copy of this insightful 14,500 word report call 212-952-7433 or see http://www.twst.com/info55.htm This report is included in the INDUSTRY/SERVICES Sector of TWST Online at http://www.twst.com/sectors/indust.html The Wall Street Transcript is a premier weekly investment publication interviewing market professionals for serious investors for over 36 years. At http://www.twst.com TWST Online provides 1000 free Interview excerpts. For recent recommendations by analysts and money managers visit http://www.twst.com/newspage.html The Wall Street Transcript does not endorse the views of any interviewee nor does it make stock recommendations. SOURCE Wall Street Transcript -0- 02/29/2000 /CONTACT: Peter McLaughlin of The Wall Street Transcript, 212-952-7433/ /Web site: http://www.twst.com/newspage.html http://www.twst.com/sectors/indust.html http://www.twst.com/info55.htm http://www.twst.com/ (JBHT CVTI EAGL MSCA KNGT HTLD FWRD) CO: Wall Street Transcript; J.B. Hunt; Covenant; Eagle Airfreight; Knight Transportation; Forward Air ST: New York IN: AUT PUB SU: RTG -0- Feb/29/2000 13:06 EOS (PRN) Feb/29/2000 13:06 85 â -0- (PRN) Feb/29/2000 13:21
The Wall Street Transcript Publishes Special Trucking Industry
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