Even if you've never stranded yourself by running out of gas, I'm sure you understand the importance of knowing that you have a reliable place to fill up when you need to.
Now, imagine that same basic thought playing out for airlines like JetBlue (NASDAQ:JBLU) or ocean shipping companies like Frontline (NYSE:FRO). Not only can you not afford to have one of your units run out of gas, but you probably have other things to worry about than trying to run your fuel operations.
That's why World Fuel (NYSE:INT) is still in a great business. The company has a worldwide network of fuel locations that service the marine and aviation transport businesses, and it can manage a lot of the risk and niggling details of fuel operations that its customers would rather not have to worry about.
For the fourth quarter, revenue jumped almost 42%, and both growth and absolute revenue dollars were fairly equal between the marine and aviation businesses. Gross margin slipped a bit, due to the aviation unit, but operating income still rose 33% for the quarter. While reported per-share earnings fell year over year, the company incurred unusual tax expense this quarter because of repatriated foreign funds.
Although this company's free cash flow was once again negative for the full fiscal year, the structural free cash flow -- which I often consider a more consistent metric for analysis and valuation -- rose by about 30%.
As you might have gathered, I like this business quite a lot. It would be difficult and expensive for a competitor to replicate World Fuel's global coverage, and suppliers like ConocoPhillips (NYSE:COP), BP (NYSE:BP), and Chevron (NYSE:CVX) simply don't want the marketing responsibilities and credit-risk headaches. Add to that the company's recent efforts to target the corporate aviation and ground transportation markets, and you'll see some ongoing growth potential.
If you're a loyal reader of my articles, you can probably guess what comes next. Yeah, I love the company, but I don't love the stock quite so much. I don't think it's expensive per se, but I'm in the habit of buying discounted merchandise, so even a fairly priced stock is going to look just a bit too pricey for me.
Oh, the burdens of being a cheapskate.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares). JetBlue is a Motley Fool Stock Advisor pick. The Fool has a disclosure policy.
