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Soft First Quarter Guidance Sinks Hub Group Inc (HUBG)

Hub Group Inc (NASDAQ:HUBG) shares have sunk 14% in afternoon trading after the company announced somewhat disappointing Q1 earnings expectations. For the time period, Hub Group management expects diluted EPS of $0.30-$0.32 when factoring a one time cost of $1.5 million for due diligence and severance expenses, versus the Street consensus of $0.45 per share. EPS was disappointing due to soft pricing caused by excess truck capacity and extraordinarily aggressive intermodal pricing.

Hub Group Inc (NASDAQ:HUBG) CEO Dave Yeager said, “We believe the current intermodal pricing environment is an aberration that will improve as truck capacity becomes tighter and pricing becomes more rational. Intermodal will always be a major part of Hub’s business. But through diversification, the inevitable cyclical rise and fall of intermodal prices will have less of an impact on earnings. We are working diligently to further diversify our product offerings through acquisitions.”

In addition to releasing EPS expectations, Hub also expects sales to grow 10-12% year-over-year for the first quarter. The company does maintain its full year 2017 diluted EPS outlook of $1.60-$1.80, however.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

Of the 742 elite funds we track, 16 funds owned $316.41 million of Hub Group Inc (NASDAQ:HUBG) and accounted for 21.40% of the float on December 31, versus 21 funds and $286.59 million respectively on September 30. Ken Fisher‘s Fisher Asset Management trimmed its stake by 4% to 1.48 million shares.

The Bottom Line

Hub Group Inc (NASDAQ:HUBG) shares are lower due to disappointing first quarter guidance. For more reading, check out ‘10 Biggest Trucking Companies In the World‘.

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Disclosure:None

nd3000/Shutterstock.com

nd3000/Shutterstock.com

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