Forward Air Corporation (NASDAQ: FWRD) provides
time-definite surface transportation and related logistics services to the North American deferred air freight market. The firm typically receives freight that has been transported by plane, sends it to a sorting facility, then dispatches it by truck to a terminal near its destination. Forward Air operates through a network of 85 terminals near major airports in the United States and Canada, contracting to cargo airlines and air freight forwarders.
The company surprised the Street last week, when it reported Q4 EPS of 43 cents and revenues of $114.5 million. Analysts had been looking for 38 cents and $104.8 million. Management also guided Q1 EPS to 32-36 cents (33 cent consensus). William Blair subsequently upgraded the issue to "outperform".
The price
popped on the news and has since been defining a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers recommend the issue with four "strong buys", one "buy" and eight "holds". Analysts see a 14% average annual growth rate, through the next five years. The FWRD Sales Growth rate (22.83%), Operating Margin (18.09%), Return on Assets (19.75%), Return on Investment (21.97%) and Return on Equity (25.17%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% 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 $25.55 and $41.90. A stop-loss of $27.40 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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