- CHART- know how to read charts. I firmly believe I can improve the price of buying or selling from an understanding of chart action.
No trends defined. Looked as though it was poised for a rebound but has been kept down by the market; 0
- ANALYSTS- read analyst reports but come to your own conclusions.
4 strong buy, 2 buy, 1 hold (according to CNBC); +1
- INSIDERS- if the people that know the company the best are not buying it, why should you?
CEO Scott Rued purchased 30,000 shares at 17.41 on February 10, 2012; +1
- MANAGEMENT DISCUSSION 10Q AND 10K- this is the only truthful thing you will read about a company. It’s composed by management, the auditors, and the firm’s lawyers. If all three of them can agree on the verbiage, it’s passed a big hurdle. Read it carefully. Pay particular attention to the Risks, Litigation, and Related Transaction sections. These are the things you will wish you had taken the time to read if something goes bad with your investment.
Since going public in May of 2010, RRTS stock price has risen almost 19%. They continue to post growth in revenue and operating income (31.7% and 85% respectively over the last two years). Q1 is historically their weakest quarter due to seasonality. Despite this, Q1 2012 operating income was up 10% from Q4 2011. Compare that to 3.8% growth in operating income from Q3 2011 to Q4 2011. 4 separate acquisitions were made in 2011 to expand their TL (truckload and logistics) section of their business which made up approximately 36% of revenues during 2011; up more than 10% from the previous year. 18.8% organic growth was seen in TL in 2011. They are the largest provider of asset-light LTL (less-than-truckload) transportation in the country in terms of revenue and use a more streamlined distribution system than the traditional hub and spoke model requiring less resources. They do carry a large amount of goodwill on their balance sheet; +1
- RELATIVE PERFORMANCE- If the stock has a superior relative performance to the market in the short term
Followed the S&P since IPO and has outperformed since February 2012; +1
- SECTOR OUTLOOK- buying a good stock in a bad sector can be a humbling experience
Sector is consistent with the performance of RRTS; +1
- CASH FLOW- cash flow is more accurate than earnings. Earnings can be more easily manipulated.
Cash flows increased by 171% from 2009 to 2010 and 1472% from 2010 to 2011; +1
- PEG RATIO- it’s good to find a company growing faster than it’s multiple.
0.35 (according to Yahoo! Finance); +1
- VALUATION- contrary to popular opinion, it does matter what you pay for a company. Check its discounted cash flow value. Buy it for less than what it’s worth, a 1, less a -1, about the same 0.
According to the DCF valuation model, with a growth term of 5 years, the stock looks very undervalued; +1
- CATALYST- what’s going to change the status quo?
At the current point in time there is no news on the horizon that could have a large impact on the stock. Future movements will depend heavily on earnings reports and potential acquisitions; -1