4 Trucking Stocks That Will Keep Rolling

The trucking industry accelerated in November, with freight tonnage rising by
0.3% that's a full 6% higher than November 2010 and the largest
year-over-year gain since June, the American Trucking Associations said on
Wednesday. "Tonnage levels continue to point to an economy that is growing,
not sliding into a recession," ATA Chief Economist Bob Costello said. "Over
the last three months, tonnage is up 2.3% and stands at the highest level since
January of this year." Two key factors are behind the tonnage growth: rising
manufacturing output and leaner retail inventories. With an uptick in
manufacturing, the sheer volume of truck freight has been increasing. And as
retailers sell existing inventory, the need to replenish stock has kept trucks
busy. Despite the rebound in its fortunes, the industry faces headwinds going
into 2012. Foremost among them is a new set of federal rules that would limit
the amount of time truck drivers can work. The Federal Motor carrier Safety
Administration (FMCSA) could publish its so-called Hours of Service (HOS)
regulations as early as Thursday. The trucking industry, which says implementing
the rules could cost more than $1 billion, has vowed to sue if the final version
is too restrictive. The HOS regulations aim to reduce crash-related deaths and
injuries by trimming truckers' maximum daily driving time from the current 11
hours to 10 and total on-duty time from the current 14 hours to 13. The industry
maintains that the new rules would result in higher costs for trucking companies
and delayed shipments, and that could trigger a slump in motor carrier freight
loads. Another challenge: hiring enough drivers. With unemployment starting to
ease slightly, the trucking industry will need to hire 135,000 new drivers by
the end of the first quarter 2012, industry sources say. Also, any prolonged
increase in fuel prices or U.S. economic fallout from Europe's ongoing debt
fiasco obviously would have a major impact on the trucking industry. Since most
trucking stocks have bounced back from their battered recession-era levels,
it's a lot harder to find a bargain now than it was earlier this year. Still,
trucking capacity is very tight currently and that gives companies the power to
boost rates and fatten margins. While no longer cheap, truck stocks with strong
fundamentals continue to offer value. Here are four that still have some gas in
the tank for 2012: C.H. Robinson (NASDAQ: CHRW ) is actually more of a
third-party logistics company that provides multimodal freight transport through
its contracts with motor carriers, railroads and others. With a market cap of
$11.2 billion, CHRW has a price-earnings-to-growth (PEG) ratio of 1.7,
indicating that the stock is overvalued (with 1.0 considered fair value). At
$68.23, the stock is trading about 9% above its 52-week low in August, and its
one-year return is –13%. Still, it has a current dividend yield of 1.75%, and
its multi-carrier focus positions it well for rail and intermodal growth
opportunities. J.B. Hunt (NASDAQ: JBHT ) provides full truckload, intermodal and
logistics services in the U.S., Canada and Mexico which is a plus because those
first two markets are forecast to shift into higher gear in 2012. With a market
cap of $5.2 billion, JBHT has a PEG ratio of about 1.2, meaning the stock is
slightly overvalued. At $44.64, JBHT is trading nearly 30% above its 52-week low
in September, and its one-year return is 12%. The stock has a current dividend
yield of 1.2%. Old Dominion Freight Line (NASDAQ: ODFL ) is a family-run,
less-than-truckload (LTL) carrier that operates mostly in the U.S. It provides
regional, inter-regional and national services, as well as logistics, supply
chain management and freight consulting services. With a market cap of $2.3
billion, ODFL has a PEG ratio of 1.3, indicating the stock is slightly
overvalued. At $40.45, the stock is trading nearly 48% above its 52-week low in
October and its one-year return is nearly 28%. Con-Way (NYSE: CNW ), a provider
of less-than-truckload (LTL) and full truckload services, has a market cap of
$1.6 billion and a PEG ratio of 0.62, which means the stock is very undervalued.
At $29, CNW is trading nearly 41% above its 52-week low in October. Although its
one-year return is –18%, the company's fundamentals are strong, and it's
likely to benefit from volume and margin growth in 2012. The stock has a current
dividend yield of 1.4%. As of this writing, Susan J. Aluise did not hold a
position in any of the stocks mentioned here.