On what is starting to look like a pretty good day for stock markets in general, one stock in particular is shining brighter than most: J.B. Hunt Transport Services (NASDAQ:JBHT), up 3% from Friday's close as of this writing.

But why are investors bidding up these shares? If you've noticed that it's earnings season and surmised that J.B. Hunt must have reported some good numbers, well, you're right. And also wrong. Let's take a look at the details. In its first fiscal quarter of 2014, J.B. Hunt reported:

  • $1.41 billion in quarterly revenue, a 9% increase year over year -- but just shy of analyst estimates
  • $0.58 per share in GAAP profit, down 5% year over year, and also several cents shy of consensus expectations for $0.62 per share
  • And an even more significant slide in free cash flow. Whereas one year ago, Hunt had generated $206.8 million in cash from operations, and spent only $115 million of that on capital expenditures (resulting in free cash flow of $91.8 million), Q1 2014 saw a steep decline in cash flow ($159 million) made worse by a steep increase in capital spending ($158.2 million).

Result: Free cash flow for the first quarter of the year barely kept its head above water, with J.B. Hunt generating less than $1 million in cash profits. To put that in context, Hunt hasn't started off a year with this little cash being generated by its business since Q1 of 2005. So while on the one hand, investors may have some basis for optimism about the stock having at least grown revenues -- on balance the news looks considerably less good than bad.

All this being said, analysts at stock shop Wunderlich are said to be pleased with J.B. Hunt's results, and call the company's results from its nonintermodal business lines "encouraging." This endorsement may be part of the reason Hunt shares are rising despite the poor numbers.

But personally, I'm less sanguine about the stock.

Don't get me wrong. Wunderlich is a fine stock analyst, and its record in road and rail stocks (as reflected here on Motley Fool CAPS) is beyond reproach. But the analyst has made mistakes in the past, and this time, Hunt's poor results weren't limited to intermodal (where revenues grew only 5%). Revenues in the company's trucking unit, for example, declined 9% on a combination of reduction in fleet size and a weather-related reduction in truck usage as well.

More importantly, even with some business lines outperforming trucking and intermodal, the stock as a whole looks overvalued. Priced at 25 times earnings today, J.B. Hunt is pegged by most analysts for earnings growth in the mid-teens. That's bad enough, but Hunt also has a history of poor earnings quality, with free cash flow lagging GAAP earnings by wide margins in most years. And now, we see 2014 getting off on the wrong foot, with the worst free cash flow results seen in any first quarter in the past decade?

Call me a pessimist, but this doesn't look encouraging to me at all.

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Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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 Motley Fool has a disclosure policy.