By William Trent, CFA of Stock Market Beat
We have written many times about why we believe the transportation companies that act more as brokers will perform better than their asset-owning peers. And yesterday, the juxtaposition between the UPS disappointment and the C.H. Robinson blowout offered a case in point. According to CH Robinson:
Total Transportation gross profits increased 19.5 percent to $246.2 million in the fourth quarter of 2006 from $205.9 million in the fourth quarter of 2005. Our Transportation gross profit margin increased to 18.3 percent in 2006 from 15.7 percent in 2005.
Pretty spectacular given the cautious guidance and reports from both asset-based truckers and non-asset-based peer Landstar (LSTR).
Disclosure: At time of publication, author is short Landstar (LSTR) put options.
The author may hold a position in the securities discussed. The author’s current holdings are as follows: Long: Union Pacific (UNP) put options; Air Products (APD) put options; Nasdaq 100 (QQQQ) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Three Five Systems (TFS); IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Starbucks (SBUX) call options; Landstar (LSTR) put options; Plantronics (PLT) put options;
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