Arkansas Best Shares Popped: What You Need to Know

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

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: Shares of trucking company Arkansas Best (Nasdaq: ABFS  ) climbed as much as 11% in intraday trading Wednesday after announcing that its freight division will raise its general shipping rates by about 6.9%.

So what: Freight rates are obviously a big key to Arkansas Best's profitability, and given the market's positive reaction to the news, it's clear that investors expect the rate hikes to stick. In fact, today's double-digit jump -- coming on extraordinarily high volume -- is the biggest the shares have had since December 2009.

Now what: I wouldn't be so quick to ride this recent wave of momentum. While today's news suggests that shipping pricing remains favorable for now, Arkansas Best's highly cyclical nature and negative returns on capital don't exactly make it the best long-term opportunity. If you insist on getting into such a fiercely competitive space, industry champs FedEx (NYSE: FDX  ) and UPS (NYSE: UPS  ) are likely the better bets.

Interested in more info on Arkansas Best? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of FedEx. The Fool owns shares of FedEx and UPS. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (1) | Recommend This Article (0)

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 Report this Comment icon found on every comment.

  • Report this Comment On July 06, 2011, at 5:45 PM, Dougrc wrote:

    There was actually two major events that fueled this jump in value, one, the general rate increase that you mentioned, and the one that actually threw fuel on the fire. ABF's lawsuit against the Teamsters and YRCW was sent back to circuit court by the federal appeals court and allowed to continue. The actual ruling contained some fairly plain language that gives the lawsuit merit where the original Judge refused to acknowledge any merit in the plaintiff's argument.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1516047, ~/Articles/ArticleHandler.aspx, 10/27/2016 1:12:37 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 hours ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 4:00 PM
ARCB $20.20 Up +0.60 +3.06%
ArcBest CAPS Rating: **
FDX $173.59 Up +1.66 +0.97%
FedEx CAPS Rating: ****
UPS $108.61 Up +0.77 +0.71%
United Parcel Serv… CAPS Rating: ****