Invest in Shipping With Expeditors International of Washington (EXPD)

Page 1 of 2

There is much allure to investing now in the shipping sector.

It is a basic industry that plays a vital role in global commerce.  Many of the stocks are trading at very low prices due to the impact of The Great Recession.  Some still pay big dividends.  Legendary investors like Wilbur Ross are buying.  But the best stock to profit from the rebound in the shipping sector is with a company that operates from dry land.

Expeditors International of Washington (NASDAQ:EXPD)

Expeditors International of Washington (NASDAQ:EXPD) provides logistic services to shippers and others for transportation needs in the United States and internationally from its Seattle headquarters.  It is far superior to shipping companies for growth, value and income investors.

For growth investors, Expeditors International is expanding operations.  The earnings-per-share (EPS) growth trend is very bullish.  As the table below shows, it is much healthier than the EPS trends for Frontline Ltd. (NYSE:FRO), DryShips Inc. (NASDAQ:DRYS), Nordic American Tanker Ltd (NYSE:NAT), and Teekay Tankers Ltd. (NYSE:TNK).

Metric Expeditors International Frontline DryShips Nordic America Tankers Teekay Tankers
Previous 5-Year EPS Growth 11.14% (43.83%) (64.46%) (73.04%) (55.61%)
EPS Growth Rate Year 12.80% (428.85%) (134.46%) (8720.83%) (140.58%)
Projected 5-Year Growth Rate 12.50% 5.00% (9.90%) 0.00% 10.00%

Source: Finviz

As shippers, these companies were hit hard by falling business falling charter rates due to the impact of the Great Recession.  Before The Great Recession hit, there was tremendous overbuilding.  As a result, the share price of each has plunged.   Frontline was trading at over 70 in 2008 and is now around $3.60. In 2007, DryShips was over $120 a share and now is under $2.20.  Around $45 in 2007, the stock of Nordic American Tankers is about $8.70.  Now under $2.90 a share, Teekay Tankers was over $24 in 2008.  By contrast, in February 2008, Expeditors was trading beneath $40 a share.  At present, it is going for around $43 a share.

In addition to the way the company avoided much of the carnage of The Great Recession from not overbuilding and then being decimated by plunging rates, value investors should find the clean balance sheet of Expeditors International of Washington to be attractive, too.  Of great appeal is that Expeditors International has no debt.  The chart below shows how larded up the balance sheets of Frontline, DryShips, Nordic American Tankers, and Teekay Tankers is with debt.  That high level of debt combined with a falling EPS growth rate could take these companies under.  That makes these shipping companies value traps, rather than value plays.

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

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

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!