The total stock return for Arkansas Best Corporation (ARCB 0.79%) is now up around 250% this year, compared to a 27% total return for the S&P 500. Although, long-term shareholders have drastically underperformed the market over the past five years with a 30% return, compared to 120% for the S&P 500. So what caused this rebound since 2012, and can Arkansas Best make up lost ground to reward long-term investors?
The rebound:
Back in late 2012, Wall Street had written Arkansas Best off for dead when it traded for half its book value and around around 0.1 times price to sales. Profits were down 13% year over year in 2012, and the company wasn't profitable on the income statement. When things started turning around, Wall Street realized the company wasn't going out of business and a massive rally began.
The future for Arkansas Best investors
Wall Street's prediction of Arkansas Best's demise has proved false, and the company's recent union agreement further disproves the naysayers. In the video below, Motley Fool analyst Blake Bos goes over the events leading to Arkansas Best's latest rally, and highlights two areas that investors need to watch. He'll also give his take on whether he thinks the company is still a good investment at today's prices.
