Celadon Group, Inc. (CGI), Knight Transportation (KNX): Where Is the Growth in Transportation?

Page 1 of 2

Warren Buffett’s recent purchase of Burlington Northern Santa Fe shoved the rail industry into the spotlight, but trucks still serve an important function. It is true that trains and water are more efficient than trucks. Still, truckers benefit from a huge road network that they are not forced to maintain. Some trucking firms are strong companies, even if they do not offer the efficiencies of rail or water.



CGI Operating Margin TTM data by YCharts

A Trucker with Challenges

Celadon Group, Inc.Celadon Group, Inc. (NYSE:CGI) operates in the United States, Canada, and Mexico. Their focus on long haul routes exposes them to greater competition with railroads. In order to be successful, profitable trucking firms will need to learn to work with more efficient means of transportation and not against them. Trucks offer greater flexibility in places where there are no railways or waterways.

Celadon Group, Inc. (NYSE:CGI) has one of the youngest fleets with an average tractor age of 1.6 years as of March, 2012. Even though the firm is not in the best place, their young fleet will help to ward off high fuel costs.

Celadon Group, Inc. (NYSE:CGI)’s total debt to equity ratio of 1.11 and current profit margin of 4.9% are concerning. Their debt load and low margins coupled with the shift of long haul traffic to railroads make this trucker one firm best left on the sidelines.

Where Trucks Shine, the Short and Medium Haul

Knight Transportation (NYSE:KNX) focuses on medium and short haul routes. In general the past couple years have been very challenging. Between fuel price increases and the great recession, the trucking industry has seen a decrease in fleet size. Many small truckers were unable to survive the collapse in demand and subsequently entered bankruptcy. This trend ended up strengthening larger firms like Knight Transportation (NYSE:KNX) that have the capital and resources to survive a downturn.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!