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Why Shares of Echo Global Logistics, Inc. Popped Today

By Travis Hoium - Oct 29, 2015 at 12:54PM

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Strong shipping is sending this logistics stock higher.

What: Shares of supply chain management company Echo Global Logistics, Inc. (ECHO) jumped 38% today after it reported earnings.

So what: Third-quarter revenue jumped 40% to $450 million and net revenue was up 50% to $87 million. Non-GAAP net income rose 41% to $10.2 million, or $0.34 per share, which was $0.02 ahead of estimates.  

Now what: Revenue continues to be strong since Echo's acquisition of Command Transportation. But investors had become concerned that the growth wouldn't translate to similar growth on the bottom line. However, stronger-than-expected earnings despite headwinds like low oil prices give investors confidence that future growth should be strong as well.

The pop today seems to be overdone, but if shares settle lower in coming weeks, this is a stock that provides nice long-term growth potential for investors.

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