According to a filing with the SEC, a family trust managed by the spouse of Douglas Duncan purchased 2,600 shares of J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) on December 5th at an average price of $58.97. Duncan is a member of J.B. Hunt’s Board of Directors and so this transaction had to be disclosed as insider trading. He had already owned 11,000 shares directly. J.B. Hunt is a trucking and logistics services company, and its stock price is up 29% year to date. Duncan’s most recent buy, according to our database of insider filings, came in November 2010 at an average price of $37.20 per share. We had also seen an insider buy at J.B. Hunt in late October at roughly the same price (see a history of insider purchases at JB Hunt). Studies show that stocks bought by insiders tend to outperform the market (read more about studies on insider trading).
Revenue was up 11% in the third quarter of the year from its levels in Q3 2011. Growth was led by intermodal operations, which is responsible for about 60% of J.B. Hunt’s revenue. Earnings increased 14% as the company was well able to control costs, including salaries and wages. A similar story holds for the first half of 2012, as the first nine months of the year have shown a 12% increase in sales while net income has been up 23%. At a market capitalization of $6.9 billion, J.B. Hunt Transport Services, Inc. trades at 23 times trailing earnings. The company would have to continue growing at a good rate in order for that pricing to make sense. Wall Street analysts predict $3 in earnings per share in 2013- up from an expected $2.58 this year- implying a forward P/E of 19.
Hedge funds generally aren’t very excited about J.B. Hunt Transport Services, Inc., with one notable exception: during the third quarter of 2012, Lone Pine Capital initiated a position of 3.8 million shares. This made J.B. Hunt one of the five largest new positions in the fund’s portfolio; Lone Pine is managed by billionaire and Tiger Cub Stephen Mandel. See more stocks Lone Pine owned.