CHRW
C.H.Robinson Worldwide Inc
Industrial/Transportation
03/20/2017
Presented
| Date | 03/16/2017 |
| Price | $78.21 |
| Market Cap | $11.12B |
| Ent Value | $11.41B |
| P/E Ratio | 21.79x |
| Book Value | $8.91 |
| Div Yield | 0.02% |
| Shares O/S | 142.16M |
| Ave Daily Vol | 1,162,848 |
| Short Int | 10.99% |
Current
| Price | $109.10 |
| Market Cap | $12.80B |
| C.H. Robinson Worldwide, Inc. provides freight transportation services and logistics solutions to companies. It is a multimodal transportation services and logistics solutions, operates through a network of branch offices in North America, Europe, Asia, South America, and the Middle East. C.H. Robinson Worldwide services include supply chain consulting and analysis, freight consolidation, core carrier program management and information reporting. The company's other services include sourcing services, contract Warehousing and fee-based information services. The Sourcing services business is primarily the buying, selling, and marketing of fresh produce. It develops proprietary brands of produce including The Fresh 1 and its world organics. The Information services is comprised of a C.H. Robinson subsidiary, T-Chek Systems, Inc. T-Chek is a business-to-business provider of spend management and payment processing services. The majority of T-Chek's customers are motor carriers and truck stop chains. T-Chek's platform supports open and closed loop networks that facilitate a variety of funds transfer, vendor payments, fuel purchasing, and online expense management. It also provides Transportation and Logistics Services. C.H. Robinson Worldwide was founded by Charles Henry Robinson in 1905 and is headquartered in Eden Prairie, MN. |
Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), C.H. Robinson Worldwide Inc (CHRW), Expeditors International of Washington (EXPD), FedEx Corporation (FDX), J.B. Hunt Transport Services Inc (JBHT), Swift Transportation Co (SWFT), United Parcel Service Inc (UPS)
Highlights
With shares of C.H. Robinson (CHRW) trading in the high $70s (~$78-79) the presenter sees a favorable risk/ reward setup on the short side. In his opinion, the business faces challenges in the short and long-term, and at 21x forward Street estimates (2017) the stock is overpriced. While the business is well-run and may see a meaningful benefit from comprehensive tax reform if/ when it comes, increasing competition is likely to pressure margins and CHRW has missed two quarters in a row (Q3 and Q4 2016). Street expectations for 2017 have come down and the presenter thinks expectations will need to be adjusted further. The timing is difficult to gauge because the net interest margin (NIM is the spread between what CHRW buys and sells trucking capacity for) can fluctuate, but he is comfortable waiting for the stock to crack as Amazon and Uber ramp up their efforts in the US logistics market. In his opinion, the secular threats to the old way of brokering trucks are just too great for the stock to continue to trade at 21x earnings.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.