If you focus on margins in an industry where many of your competitors will compete on price, you can do well. That's been the formula for a long time at Arkansas Best (NASDAQ:ABFS), and the reward has been above-average returns on capital for quite some time now. Of course, a lot of truckers have been posting double-digit returns on capital lately, so the true advantage of this company may not be so apparent until the cycle heads back down.

But not everything is going great for this trucker. Revenue was up 8% this quarter, and that's not too bad, though pricing momentum doesn't seem all that strong. Turning to profitability, how Arkansas Best did is something of a matter of interpretation. If you adjust for both an accounting charge and a change in workers' comp expense assumptions, the operating ratio improved ever so slightly.

But that might be part of the problem. Arkansas Best likes to focus on maintaining solid margins, but has it reached the end of what it can do in this cycle? After all, you still hear reports about difficulties in recruiting drivers -- though I think Arkansas Best has an edge here -- and fuel prices aren't exactly moving down. Plus, you have smaller (in revenue) carriers like Old Dominion (NASDAQ:ODFL), Knight (NYSE:KNX), and Heartland (NASDAQ:HTLD) occasionally nipping at their heels in some markets.

On the flip side, I'm a value guy, and I believe in taking a second and third look at well-run companies that are suffering through periods of getting no love. And here's the thing on Arkansas Best -- if you project just half of its historical structural free cash flow growth into the future, it still ends up undervalued.

So what to do? Abandon your Genesee & Wyoming (NYSE:GWR), Burlington Northern (NYSE:BNI), and CSX (NYSE:CSX) and buy into a potentially undervalued trucker? I'm not going that far -- after all, sometimes undervalued stocks stay that way for a good, long while. What I will say, though, is that this might be worth at least a second look and maybe a position on a monitor list while we see how the trucking sector shakes out this year.

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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).