Top Freight Companies To Invest In Right Now

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Ultratech (Nasdaq: UTEK  ) , whose recent revenue and earnings are plotted below.

Top Freight Companies To Invest In Right Now: Vitran Corporation Inc (VTNC)

Vitran Corporation Inc. (Vitran), incorporated on April 29, 1981, is a provider of freight surface transportation and related supply chain services throughout Canada 34 states in the eastern, southeastern, central, southwestern, and western United States. The Company’s business consists of Less-than-truckload services (LTL). These services are provided by stand-alone business units within their respective regions. Vitran’s business is carried on through its subsidiaries, which hold the licenses and permits required to carry on business. As of December 31, 2012, Vitran’s principal wholly owned operating subsidiaries included Vitran Express Canada Inc. (Ontario), Can-Am Logistics Inc. (Ontario), Vitran Logistics Ltd. (Ontario), Expediteur T.W. Ltee (Canada), Vitran Corporation (Nevada), Vitran Express Inc. (Pennsylvania), Vitran Logistics Corp. (Delaware), Vitran Logistics Inc. (Indiana), and Las Vegas/L.A. Express, Inc. (California). In March 2013, Vitran Corp Inc com pleted divestiture of its Supply Chain Operation division to Legacy Supply Chain. In October 2013, Vitran Corporation Inc. completed the sale of its United States LTL business.

LTL Services

Within Canada, the Company provides next-day service within Ontario, Quebec and parts of western Canada, and generates its revenue from the movement of LTL freight within the three- to five-day east-west service lanes. The majority of its trans-Canada freight is shipped intermodally, whereby the Company’s containers are loaded onto rail cars and trans-loaded to Vitran facilities where Vitran’s network of owner operators pick up and deliver the freight to various destinations. During 2012, Vitran’s Canadian LTL business represented approximately 27.6% of total LTL revenues. Vitran’s Transborder Service Solution (inter-regional) provides over-the-road service between its Canadian LTL and United States LTL business units.

Advisors’ Opinion:

  • [By Monica Gerson]

    Breaking news

    Vitran Corporation (NASDAQ: VTNC) announced today that it has entered into a definitive arrangement agreement with TransForce pursuant to which TransForce has agreed to acquire all of the outstanding common shares of Vitran not already owned by TransForce for US$6.50 in cash per share, in accordance with TransForce’s prior proposal. To read the full news, click here. ReneSola (NYSE: SOL) today announced it signed a Memorandum of Intent (MOI) to sell three utility-scale projects in Western China, with a total capacity of 60MW, to Jiangsu Akcome Solar Science & Technology Co on December 30, 2013. To read the full news, click here. Cooper Tire & Rubber Company (NYSE: CTB) today announced it has terminated the merger agreement with Apollo Tyres (NSE:ApolloTYRE). To read the full news, click here. RedHill Biopharma (NASDAQ: RDHL) today announced that it has entered into a definitive agreement with leading healthcare investor OrbiMed Israel Partners Limited Partnership, an affiliate of OrbiMed Advisors LLC, for the sale of RedHill’s American Depository Shares and warrants in a private placement transactionor a total sum of $6.0 million. To read the full news, click here.

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Top Freight Companies To Invest In Right Now: Universal Truckload Services Inc (UACL)

Universal Truckload Services, Inc., incorporated on December 11, 2001, is engaged in providing transportation services to shippers throughout the United States and in the Canadian provinces of Ontario and Quebec. The Company’s over-the-road trucking services include both flatbed and dry van operations and it provides rail-truck and steamship-truck intermodal support services. It also offers truck brokerage services, as well as full service international freight forwarding and customs house brokerage services. The Company provides truckload transportation and related services for a range of general commodities over irregular routes using dry and specialty vans and un-sided trailers, including flatbed, drop deck, and specialty. In December 2013, the Company announced that it has completed acquisition of Westport Axle Corporation.

The Company primarily operates through a contractor network of agents and owner-operators who provide the Company with approximately 3,100 tractors and approximately 3,000 trailers. At December 31, 2011, the Company had approximately 565 agents. The Company conducts its operations through its wholly owned operating subsidiaries under the brand names, such as Universal Am-Can, Ltd., Mason & Dixon Lines, Inc., Louisiana Transportation Inc., Mason Dixon Intermodal, Inc., Economy Transport, Inc., Great American Lines, Inc., Universal Logistics Solutions, Inc., Universal Logistics Solutions International, Inc. and Cavalry Transportation, LLC.

The Company provides services in three categories, such as truckload services, brokerage services and intermodal support services. The Company transports a range of general commodities, including machinery, building materials, paper, food, consumer goods, automotive parts, furniture, steel and other metals. During the year ended December 31, 2011, its truckload operations represented 60.5%, of its operating revenues.

The Company provides primari ly broker freight to third-party transportation providers th! rough its agent network at times when the Company generates more freight business than it can service with its available owner-operators. The Company offers full service international freight forwarding and customs house brokerage services, as well as third-party logistic services. During 2011, its brokerage services represented 24.8%, of its operating revenues. Its intermodal support services are primarily short-to-medium distance delivery of rail and steamship containers between the railhead or port and the customer and drayage services. During 2011, its intermodal support services represented 14.7% of its operating revenues.

The Company’s agents provide the primary interaction with its shippers. They generate freight shipments and also provide terminal and dispatch services for the owner-operators and are an essential source for recruitment of new owner-operators. The agents use a company-provided software program to list available freight procured by the a gent, dispatch owner-operators to haul the freight and provide all administrative information necessary for it to establish the credit arrangements for each shipper. The owner-operators are individuals who own, operate and maintain one or more tractors that they either provide drivers, or drive themselves. The Company’s owner-operators provide it with approximately 3,100 tractors. Owner-operators also may own trailers that they provide the Company in addition to their tractor and driving services. As of December 31, 2011, its owner-operators provided approximately 3,000 trailers, which represent over 50% of the trailers the Company use in its business.

Advisors’ Opinion:

  • [By Seth Jayson]

    Calling all cash flows
    When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Universal Truckload Services (Nasdaq: UACL  ) , whose recent revenue and earnings are plotted below.

  • [By Sean Williams]

    What: Shares of Universal Truckload Services (NASDAQ: UACL  ) , a North American provider of trucking and logistics solutions, jumped as much as 12% after receiving an upgrade from BB&T Capital Markets.

Top Freight Companies To Invest In Right Now: Hub Group Inc (HUBG)

Hub Group, Inc., incorporated on March 8, 1995, is an asset-light freight transportation management companies. The Company offers intermodal, truck brokerage and logistics services. The Company operates distinct business segments: Mode, which includes the acquired Mode business acquired by the Company on April 1, 2011, and Hub, which is all business other than Mode. Both segments offer intermodal, truck brokerage and logistics services. Hub operates through a network of operating centers throughout the United States, Canada and Mexico. Hub services a diversified customer base in a broad range of industries, including consumer products, retail and durable goods. Mode markets and operates its freight transportation services primarily through its network of independent business owners (IBOs) who enter into contracts with Mode. Mode’s company managed operation includes a business arranging for the transportation of raw materials and finished products for a food producer and, t o a lesser extent, other highway brokerage, intermodal and logistics operations.

Intermodal

As an intermodal marketing company (IMC), the Company arranges for the movement of its customers freight in containers and trailers, typically over long distances of 750 miles or more. The Company contracts with railroads to provide transportation for the long-haul portions of the shipment and with local trucking companies, known as drayage companies, for pickup and delivery. As part of the Company’s intermodal services, the Company negotiates rail and drayage rates, electronically tracks shipments in transit, consolidate billing and handle claims for freight loss or damage on behalf of its customers.

The Company uses its network to access containers and trailers owned by leasing companies, railroads and steamship lines. The Company is able to track trailers and containers entering a service area and reuses that equipment to fulfill the customer s’ outbound shipping requirements. As of December 31, 2012, ! Hub had access to approximately 9,111 rail-owned containers for the Company’s dedicated use on the Union Pacific (UP) and the Norfolk Southern (NS) rails. In addition to these rail-owned containers, as of December 31, 2012, the Company had a total of 14,756 53-inch private containers for use on the UP and NS. The Company financed 6,167 of these containers with operating leases and the Company owns 8,589 containers.

As of December 31, 2012, approximately 66% of the Company’s drayage needs were met by its subsidiary, Comtrak Logistics, Inc. (Comtrak), which assists its customers. Comtrak has terminals in Atlanta, Birmingham, Charleston, Charlotte, Chattanooga, Chicago, Cleveland, Columbus (OH), Dallas, Harrisburg, Huntsville, Indianapolis, Jacksonville, Kansas City, Milwaukee, Memphis, Nashville, Newark, Los Angeles, Perry (FL), Philadelphia, Savannah, Seattle, St. Louis, Stockton, and Titusville (FL). As of December 31, 2012, Comtrak owned 260 tractors, leased or owned 448 trailers, employed 296 drivers and contracted with 2,178 owner-operators.

Truck Brokerage (Highway Services)

The Company is a truck broker in the United States. As part of the truck brokerage services, the Company negotiates rates , track shipments in transit and handle claims for freights loss and damage on behalf of its customers.

Logistics and Other Services

Hub’s logistics business operates under the name of Unyson Logistics. Unyson Logistics consists of a network of logistics professionals dedicated to developing, implementing and operating customized logistics solutions. Unyson offers a range of transportation management services and technology solutions, including shipment optimization, load consolidation, mode selection, carrier management, load planning and execution and Web-based shipment visibility. Unyson Logistics operates throughout North America, providing operations through its main operating loca tion in St. Louis with additional support locations in Bosto! n, Chicag! o, Cleveland and Minneapolis. Certain Mode agents provide logistics services. The Company’s multi-modal transportation capabilities through both the Hub and Mode segments include small parcel, heavyweight, expedited, less-than-truckload, truckload, intermodal and railcar.

Advisors’ Opinion:

  • [By Lisa Levin]

    Hub Group (NASDAQ: HUBG) surged 3.13% to $44.20. The volume of Hub Group shares traded was 388% higher than normal. Hub Group reported its Q1 earnings of $0.33 per share on revenue of $848.40 million. Longbow Research upgraded Hub Group from Neutral to Buy.

Top Freight Companies To Invest In Right Now: Con-way Inc (CNW)

Con-way Inc. (Con-way), incorporated in 1958, provides transportation, logistics and supply-chain management services for a wide range of manufacturing, industrial and retail customers. Con-way’s business units operate in regional and transcontinental less-than-truckload and full-truckload freight transportation, contract logistics and supply-chain management, multimodal freight brokerage, and trailer manufacturing. Con-way is divided into four segments: Freight, Logistics, Truckload, and Other. At December 31, 2011, Con-way Freight operated 286 freight service centers, of which 144 were owned and 142 were leased. At December 31, 2011, Con-way Freight owned and operated approximately 9,200 tractors and 26,400 trailers, including tractors held under capital lease agreements.

Freight

The Freight segment consists of the operating results of the Con-way Freight business unit. Con-way Freight is a less-than-truckload (LTL) motor carrier that utilize s a network of freight service centers to provide day-definite regional, inter-regional and transcontinental less-than-truckload freight services throughout North America. LTL carriers transport shipments from multiple shippers utilizing a network of freight service centers combined with a fleet of line-haul and pickup-and-delivery tractors and trailers. Freight is picked up from customers and consolidated for shipment at the originating service center. Freight is consolidated for transportation to the destination service centers or freight assembly centers. At Freight assembly centers, freight from various service centers can be reconsolidated for transportation to other freight assembly centers or destination service centers. From the destination service center, the freight is delivered to the customer. Typically, LTL shipments weigh between 100 and 15,000 pounds. In 2011, Con-way Freight’s average weight per shipment was 1,305 pounds.

Logistics

The Logistics segment consists of the operating results o! f the Menlo Worldwide Logistics business unit. Menlo Worldwide Logistics develops contract-logistics solutions, which can include managing complex distribution networks, and providing supply-chain engineering and consulting, and multimodal freight brokerage services. Menlo Worldwide Logistics’ supply-chain management offerings are primarily related to transportation-management and contract-warehousing services. Transportation management refers to the management of asset-based carriers and third-party transportation providers for customers’ inbound and outbound supply-chain needs through the use of logistics management systems to consolidate, book and track shipments. Contract warehousing refers to the optimization and operation of warehouses for customers using technology and warehouse-management systems to reduce inventory carrying costs and supply-chain cycle times. For several customers, contract-warehousing operations include light assembly or kitting operations.

Menlo Worldwide Logistics provides its services using a customer- or project-based approach when the supply-chain solution requires customer-specific transportation management, single-client warehouses, and/or single-customer technological solutions. However, Menlo Worldwide Logistics also utilizes a shared-resource, process-based approach that leverages a centralized transportation-management group, multi-client warehouses and technology to provide scalable solutions to multiple customers. Additionally, Menlo Worldwide Logistics segments its business based on customer type. At December 31, 2011, Menlo Worldwide Logistics operated 76 warehouses in North America, of which 55 were leased by Menlo Worldwide Logistics and 21 were leased or owned by clients of Menlo Worldwide Logistics. Outside of North America, Menlo Worldwide Logistics operated an additional 63 warehouses, of which 48 were leased by Menlo Worldwide Logistics and 15 were leased or owned by clients. Men lo Worldwide Logistics owns and operates a small fleet of tr! actors an! d trailers to support its operations, but primarily utilizes third-party transportation providers for the movement of customer shipments.

Truckload

The Truckload segment consists of the operating results of the Con-way Truckload business unit. Con-way Truckload is a full-truckload motor carrier that utilizes a fleet of tractors and trailers to provide short- and long-haul, asset-based transportation services throughout North America. Con-way Truckload provides dry-van transportation services to manufacturing, industrial and retail customers while using single drivers as well as two-person driver teams over long-haul routes, with each trailer containing only one customer’s goods. This origin-to-destination freight movement limits intermediate handling and is not dependent on the same network of locations utilized by LTL carriers. On average, Con-way Truckload transports shipments more than 800 miles from origin to destination. Under its regional s ervice offering, Con-way Truckload transports truckload shipments of less than 600 miles, including local-area service for truckload shipments of less than 100 miles.

Con-way Truckload offers through-trailer service into and out of Mexico through all major gateways in Texas, Arizona and California. For a shipment with an origin or destination in Mexico, Con-way Truckload provides transportation for the domestic portion of the freight move, and a Mexican carrier provides the pick-up, linehaul and delivery services within Mexico. At December 31, 2011, Con-way Truckload operated five owned terminals with bulk fuel, tractor and trailer parking, and in some cases, equipment maintenance and washing facilities. In addition, Con-way Truckload also utilizes various drop yards for temporary trailer storage throughout the United States. At December 31, 2011, Con-way Truckload owned and operated approximately 2,700 tractors and 8,000 trailers, including tractors held under capital lease agreements.

Other

! The Other! reporting segment consists of the operating results of Road Systems, a trailer manufacturer, and certain corporate activities for which the related income or expense has not been allocated to other reporting segments, including results related to corporate re-insurance activities and corporate properties. Road Systems primarily manufactures and refurbishes trailers for Con-way Freight and Con-way Truckload.

Advisors’ Opinion:

  • [By John Kell]

    Con-way Inc.(CNW) issued a weaker-than-expected profit outlook for the fourth quarter after the trucking company encountered challenges at its Con-way Freight and Menlo Worldwide Logistics operations. The company’s shares declined 6.1% to $38.89 premarket.

  • [By Ben Levisohn]

    Shares of Atlas Air have plunged 15% to $37.13 today at 1:48 p.m., on what has been a lousy day for shippers and those involved with shipping. Trucking company Con-Way (CNW) has fallen 2.5% to $40.38 after it said earnings would be unchanged from a year ago, well short of analyst forecasts. FedEx (FDX) has dropped 0.7% following UPS’s miss.

  • [By Ben Levisohn]

    Shares of Heartland Express have gained 50% this year, trumping the 38% rise in Con-Way (CNW) and the 29% advance in J.B. Hunt Transport Services (JBHT) but lagging Old Dominion Freight Lines (ODFL) and Swift Transportation (SWFT).

Top Freight Companies To Invest In Right Now: Knight Transportation Inc (KNX)

Knight Transportation, Inc. (Knight), incorporated on August 31, 1989, is a provider of multiple truckload transportation services, which generally involve the movement of full trailer or container loads of freight from origin to destination for a single customer. The Company is a provider of multiple truckload transportation services with a nationwide network of service centers through which it operates one of the tractor fleets. In addition to its own fleet, the Company also partners with third-party equipment providers to provide truckload capacity and a broad range of solutions to truckload shippers. The Company has five operating segments comprised of three asset-based operating segments: dry van truckload, temperature-controlled truckload and port services and two non-asset-based operating segments brokerage and intermodal services. Through its asset-based and non-asset-based capabilities the Company is able to transport, or can arrange for the transportation of, gen eral commodities for customers throughout the United States and parts of Canada and Mexico.

The Company’s asset-based businesses generally include dry van truckload, refrigerated truckload, dedicated truckload, and drayage services. Its non-asset-based services generally include rail intermodal and truckload brokerage services. However, within its asset-based services, the use of independent contractors to provide tractors lowers the capital investment in its dry van and refrigerated operations. In addition, drayage operations generally involve less expensive tractors with longer lives and do not require a investment in trailering equipment. As of December 31, 2012, it operated 3,627 company-owned tractors with an average age of 1.9 years. It also had under contract 507 tractors owned and operated by independent contractors. Its trailer fleet consisted of 9,564 53-foot long trailers with an average age of 5.5 years and includes 1,092 temperature-controlled trai lers.

Advisors’ Opinion:

  • [By Victor Nguyen]

    A report released Thursday morning, Citigroup analyst Christian Wetherbee upgrades Knight Transportation (NYSE: KNX) to BUY from NEUTRAL, increasing price target from $17 to $22.

  • [By Sean Williams]

    Swift Transportation (NYSE: SWFT  ) , for example, delivered a 4% increase in revenue this past quarter in spite of having fewer trucks in service. The company was able to realize better utilization of its existing fleet and actually saw fuel prices fall from the previous year. The results were even more robust for Knight Transportation (NYSE: KNX  ) , whose shareholders saw revenue rise by 7% as the company grew from the year-ago quarter for the 14th straight time and delivered growth from each of its business segments.

  • [By Seth Jayson]

    Calling all cash flows
    When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Knight Transportation (NYSE: KNX  ) , whose recent revenue and earnings are plotted below.

Top Freight Companies To Invest In Right Now: Chalmers Ltd (CHR)

Chalmers Limited is an Australia-based company engaged in transport, logistic services, warehousing and container storage, repairs and sales. The Company operated in three segments: Transport, Containers and Property. Transport consists of road transport, predominantly import/export FCL containers and the interface with logistics/ warehousing/hubbing services. Containers represent the empty container park operations concerned with handling, storage, repairs, upgrades, pretrips and so on of empty containers on behalf of shipping and leasing company customers. Property represents the capital investment Chalmers has in freeholds located in Melbourne. The Company’s subsidiaries include Chalmers Industries Pty Ltd, Chalmers (Australia) Pty Ltd and Chalmers Industries (Brisbane) Pty Ltd. Advisors’ Opinion:

  • [By Corinne Gretler]

    Chr. Hansen A/S (CHR) slid 1.7 percent to 186 kroner after Credit Suisse Group AG cut the stock to neutral, the equivalent of hold, from outperform. The brokerage said that profit from its natural-color business remains under pressure. The world’s biggest maker of dairy enzymes cut its full-year sales forecast on July 3 because of lower prices for the red pigment carmine.