Old Dominion Freight Shares Popped: What You Need to Know

By Rich Smith | More Articles
April 27, 2011 | Comments (4)

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: About six months ago, I told you to prepare for "a trucking renaissance." Remember? Well, guess what -- it just pulled into the delivery bay. This morning, less-than-truckload weight trucker Old Dominion Freight (Nasdaq: ODFL ) hit the gas and gunned its stock price up 10%. Its fuel of choice: an earnings beat.

So what: Citing a massive 21% spike in shipping volume, Old Dominion confirmed that the trucking industry is pulling out of a three-year slump, with the company nearly tripling quarterly profits and delivering $0.38 per share into the pockets of shareholders.

Now what: OD's winning quarter follows similarly strong results out of JB Hunt (Nasdaq: JBHT ) this month and came simultaneously with much larger shipper UPS (NYSE: UPS ) reporting a "beat" of its own -- two facts that suggest this revival may be as wide as it is deep. On the other hand, rival Arkansas Best (Nasdaq: ABFS ) turned in more tepid results Monday.

The big question for trucking speculators remains: Which road will notorious yo-yo stock YRC Worldwide (Nasdaq: YRCW ) follow?

Add it to your watchlist, and be first to learn the answer when YRC reports next month.

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The Fool owns shares of United Parcel Service, but Fool contributor Rich Smith does not own (or short) shares of any company named above. The Motley Fool has a disclosure policy.

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Read/Post Comments (4) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On April 27, 2011, at 2:44 PM, Mustang6147 wrote:

Old Dominion is a horrible outfit. They treat their employee's like dirt. How can anyone say they pressed the gas, when all they have done is whored the industry.
Report this Comment On April 27, 2011, at 3:23 PM, quickymart wrote:

Funny that he called YRCW a yo-yo stock. Yo-yos actually go up as much as they go down. YRCW is down about 99% from a couple years ago. All down, no up.
Report this Comment On April 27, 2011, at 11:41 PM, TMFDitty wrote:

No, they're up from time to time as well:
http://www.fool.com/investing/general/2010/10/18/yrc-worldwi...
http://www.fool.com/investing/general/2010/12/17/yrc-worldwi...
In fact, they were once up so much as to make me doubt my calculations, and re-check my numbers to see if the short thesis was still intact:
http://www.fool.com/investing/general/2011/01/27/yrc-worldwi...
It was.
TMFDitty
Report this Comment On June 02, 2011, at 2:26 PM, odgirl777 wrote:

I think Mustang must work for YRC and is jealous. OD is an amazing company to work for, they treat their employees very well, and they actually know what is important, and how to run a business correctly. That is why none of us lost our 401k during the recession or our match. They have not cut our wages, or made us pay more or all for health insurance. OD is shrewd and watches every penny, but does not pinch them. They run the business like a family and the budget like a reasonable household. I have been with them for 5 years, my husband for 7. The longest by far we have ever worked for any one company and have no desire to go elsewhere. Do your homework on ODFL and you might be impressed.

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