I always enjoy reading your analysis of the various stocks on your website and was wondering about your take on TransForce.
The stock is trading at a substantially lower cost then CNR and CP and also has a lower PE then them.
Thanks for your kind words and the assignment. TransForce Inc. is a major player in the trucking industry that has been growing through acquisitions and partnerships. They serve a number of different segments in trucking including parcel, less-than– a-truckload, truckload, and specialized services.
When it comes to comparing trucks and railroads you need to keep in mind that they are competitors. Trucks move smaller loads on a timely basis but at higher cost while rail moves bulk at lower costs but over a longer period of time. My pal, Manny Dinis, a principal at Triple Star Logistics, recently schooled me on the transportation of fresh produce. Carrots and potatoes move on rail, berries on truck. Make sure you are comparing apples to apples when you consider investments in alternative forms of transportation.
A study of the charts will inform my thoughts on this investment.
The three-year chart has a number of features worth investigating. The uptrend line that started in July of 2012 when the shares were trading at $16.00 has been tested many times but not seriously breached. In addition there have been numerous tests of support along the 50- and 200-day moving averages without a dramatic break. Finally the MACD and the RSI both signalled a buy in mid October as the stock moved off of $21.50.
The six-month chart provides a close-up of the buy signals generated by the MACD and the RSI in October. Currently the momentum indicators are suggesting that there is more in the tank.
TFI has met or beaten earnings expectations in seven of the last eight quarters which will always help move a stock higher. Average daily volume over the last three months has been 185, 537 shares. Over the last 30 days there have been 15 days with better than average volume. Five of the last ten days of trading have also posted better than average volume. At this point all of the evidence presented suggests that TFI is a buy.
Worth reading is a Globe and Mail article by David Milstead from Sept. 6 which discusses opportunities in the trucking industry.
Make it a profitable day and happy capitalism!
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