C.H. Robinson Worldwide (CHRW)
From Cabot Wealth Advisory 4/9/13. Sign up for free Cabot Wealth Advisory
C.H. Robinson (CHRW) is one of the largest transportation and logistics companies in North America. The company was founded way back in 1905 and is now headquartered in Eden Prairie, Minnesota. C.H. Robinson provides multimodal transportation services and logistics through a network of 250 offices in North America, South America, Europe, Asia and Australia.
The company offers several types of transportation services, including shipping by trucks, trains, ocean vessels and airplanes and using intermodal containers. The company does not own expensive transportation equipment.C.H. Robinson has contracts with 50,000 transportation companies, including motor carriers, railroads, air freight and ocean carriers. The company maintains the largest system of transportation capacity in North America. In addition, C.H. Robinson operates logistics services, such as fresh produce transport, freight consolidation and cross-docking.
The company has demonstrated steady growth during the past 15 years with 14 increases in EPS (earnings per share) and dividend increases in every year.
Recent acquisitions and rising costs slowed earnings growth in 2012, which caused CHRW’s stock price to decline to bargain levels. I expect cost controls and cost savings from acquisitions to boost EPS by 19% during the next 12 months ending 3/31/14, after rising 6% in the past 12 months. Sales will likely increase 11%, same as a year ago.
At 17.6 times my forward EPS estimate of 3.40, and with a dividend yield of 2.3%, CHRW is clearly undervalued. Shares will likely rise to my Min Sell Price of 79.25 within one to two years.
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|CH Robinson Worldwide (CHRW)
14701 Charlson Road
Eden Prairie, Minnesota 55347-5088
|Index Membership: Dow Jones Composite, Dow Transportation, Nasdaq 100
Industry: Air Delivery & Freight Services
Full Time Employees: 10,929