Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Two Logistics Stocks Set to Outperform the Market: Expeditors International of Washington (EXPD), Seaspan Corporation (SSW)

Page 1 of 2

The world economy is still suffering from the backlash of the 2008 financial meltdown, as well as facing other economic uncertainties. The British economy is worse now than it was in the great depression. China has been slowing down its massive growth, and Russia’s economy is experiencing similar slowdowns. Despite all of this bad news, Ibelieve that the worldeconomy is going to improve in the next few years.  I’m a big fan of being greedy when others are fearful, and it seems that the IMF agrees with me. In the United states, unemploymentis finally starting to shrink, from 9.5% a year and a half ago to under 8% unemployed today. Likewise, with a slight blip at the end of 2012,GDP has continued torise, and the Consumer Confidence Index hascontinued to slowly risesince thefinancial meltdown of 2008. The consumer confidence index is trending upwards in other coutries as well, most notably China.

Expeditors International of Washington (NASDAQ:EXPD)One way to try and make money off of an improving world economy is to invest in logistics stocks, companies that help move and distribute material for other businesses. These companies often work internationally, and hold an advantage over  stocks such as United Parcel Service, Inc. (NYSE:UPS), because it can take advantage of worldwide growth and recovery. Here, we will look at two of these companies: Expeditors International of Washington (NASDAQ:EXPD), and Seaspan Corporation (NYSE:SSW)

Expeditors International: The poster child of a well run company

Expeditors International of Washington (NASDAQ:EXPD) runs a large array of logistics services. They are hired by other companies to provide supply chain services, move things through different countries, customer customs, etc. Their customer base is very diverse, with 410 offices spread across six continents   While other companies have grown through acquisition, Expediters has been laser focused on growing organically, decreasing margins, and training and retaining it’s workforce.  It has no long term debt, good and constant cash flow, and, perhaps best of all, an excellent executive team with a sense of humor.

When investors look for an example of a well-run company, often the they turn to Expeditors. I first learned of Expediters was when I was reading commentary on Microsoft Corporation (NASDAQ:MSFT)’s acquisition of Skype for $8.5 billion, after eBay Inc (NASDAQ:EBAY) bought Skype for $2.6 billion seven years earlier. This letter in particular by Dan Ferris gives interesting comparisons in how the two companies treat capitol allocation. Likewise, I’d point investor’s to Jim Mueller’s great article on Expeditors when he bought some for his real money rising star portfolio.

Expeditors may be on a bit of a sale right now.  The stock has shed about 10% of it’s value from a few weeks ago after the company reported it’s 2012 Q4 earnings.  In the earnings statement   Expeditors International of Washington (NASDAQ:EXPD) showed that, while revenue continued to rise from last year, they experienced a spike in the cost of Air freight faster than Expeditors could adjust their rates to compensate. Expeditors always looks expensive; after all, you are paying for the great management and business with a price to earnings ratio of around 25.  But I believe this company will outperform the S&P over the next 5 years. I would recommend buying on a dip.

Perhaps a better option to buying stock outright would be to write slightly in the money puts. While I like the company, I don’t think Expeditors will shoot to the moon in the next few months. The $40 May 2013 put looks especially good, paying around $3.  This would either give you the obligation to buy one hundred shares of Expeditors at the adjusted price of $37, or make about a 30% annualized gain on your capital at risk, depending on if Expeditors is above $40 or not in May.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!