Kirby Corporation: Share price defines bullish 'flag' pattern

Kirby Corporation (NYSE: KEX) is the largest inland tank barge operator in the United States, transporting petrochemicals and agricultural chemicals via a fleet of some 900 barges and 240 towboats. The firm also owns and operates four ocean-going barge and tug units, transporting dry-bulk commodities along the coast. Further, Kirby is a leading provider of diesel engine services for the marine, rail, and industrial markets. Customers include Exxon Mobil (NYSE: XOM) and Dow Chemical (NYSE: DOW).

The company pleased investors last week when it announced that it was expecting Q4 EPS to exceed 62 cents. That topped the average Street expectation for a 61 cent per share profit. Management cited continued strength in Kirby's core businesses for the positive view. KEX shares popped on the news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the stock with five "strong buys," two "buys" and three "holds." Analysts see a 19% average annual growth rate through the next five years. The KEX PEG ratio (1.01), Sales Growth rate (14.36%), EPS Growth rate (33.33%) and Return on Assets (8.44%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 87% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $34.36 and $50.72. A stop-loss of $34.15 looks good here. Note that the firm is expected to release fourth quarter results on January 30, after the close.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.