Glenn Krevlin Finds Buying Opportunity In This Company Down Over 50% In 2015

UTi Worldwide’s operating activities are subject to seasonal fluctuations, especially in its Freight Forwarding segment. Therefore, the company generally experiences increased activity during its peak season, which is during the second and third fiscal quarters. However, the company acknowledged that some preliminary indications suggest a potential weakening in its supposed peak season, so it expects lower airfreight trade volumes during the third fiscal quarter. Even so, UTi Worldwide announced a few days ago that it would assist Sedgman Limited, one of its longtime clients, in transporting a mineral processing plant in several sections from China to the United States. These sections, which weigh 10,000 tons on aggregate, are set to be shipped to New Jersey in early 2016.

UTi Worldwide Inc. (NASDAQ:UTIW)’s fiscal 2015 turned out to be a challenging year for the company, but fiscal 2016 does not show any strong signs of recovery either. On September 3, the company reported its financial results for the second quarter of 2016 that ended July 31, posting revenues of $913.9 million, down by 16.5% year-over-year. Net revenues decreased as well, reaching $338.5 million, down from $393.7 million reported last year. The top-line was mainly impacted by lower air and ocean volumes in freight forwarding, along with the strengthening U.S. dollar. Furthermore, the company’s adjusted EBITDA for the quarter came to $11.2 million, compared with $23.8 million reported a year ago.

To sum up, the shares of UTi Worldwide have lost more than half of their value since the beginning of the year, but they might have been hit by the market too strongly. Unquestionably, Glenn J. Krevlin’s Glenhill Advisors looks at this stock as an attractive investment opportunity, so make sure that you do not pass by this stock without taking a closer look at its fundamentals.

Disclosure: None