Trucking Sector (USAK and ULH)
Admittingly Surprised that nobody seemed to jump aboard this sector, when I made my case for it. All we keep hereing is about how rates are incredibly strong, and there no sign in site of this letting up. If that is the case than trucking stock EPS is going to continue to rise.
The Two I own ULH and USAK are both cheap stocks, yet for some reason I would expect more people interested in them and the sector as a whole.
ULH is currently in the low 23's, that is down from almost $28 it hit earlier in the year.
The stock reported .80 in q1, which beat analyst estimates by .10. Analyst currently expect $3.22 for the current FY and $3.65 for the next FY, I believe both of those number will probably proven to be significantly lower than reality. But even with these numbers they are trading at 7 Times this years earnings, and 6 times next years earnings estimates. They have had a history of remaining profitable, even in downtimes. They also pay a divy of about 1.8% which is not huge, but at the same time, this might be a solid way and constent way to play the sector which is red hot, and probably is going to stay that way for a while based on demand. And your getting it off it's high and a PE of 7 times this years estimates, which I believe will proven to be low. But time will tell on that.
USAK is another purchase I made in the sector. This one is much smaller than ULH, and recently beat there last quarter by .20 reporting .43 when analyst were expecting just .23. Analyst are now expect $2.20 for the current FY and $2.22 for the next FY. Which is essentially less than 7 times this years earnings which I believe the estimate will probably be low. USAK is waaaaaaaay off it's highs earlier in the year of $21.89 so your not buying it at it's highs here.
I believe this sector is very attractive and I feel they have pricing on there side, but not just for this quarter, but probably at the very least all the way out to sometime in 2022 if not more than that. I also think most of there peers get much higher PE, they could be attractive to larger companies in terms of and acquisition perspective, but in reality they also I believe just on there own could revalue to more of a peer multiple which could be double the PE's they are carrying now.
Conclusion: I think this sector hasn't been highlighted enough, and I believe USAK and ULH are good ways to play the sector. The sector makes up about 6% of my portfolio between these two stocks, and I continue to believe they are very good bets in the next 6 months. Time will tell. All is just my opinion, and I could always be wrong though.
AI
