Buy Expeditors (EXPD)

One of my favorite stocks is Expeditors (EXPD), or for its full name, Expeditors International of Washington. It’s a little difficult to explain exactly what Expeditors does. They’re a shipping company. Except they don’t own any ships, or trucks or airplanes. They lease with carrier to take care of all your shipping needs. And I mean all your shipping needs. Not only will they ship your goods, but they also take care of customs. They’ll warehouse your goods, and even they even provide insurance services. Best of all, the company’s CEO is named Peter Rose. Not that Pete Rose. But this Peter Rose did play hockey.
Expeditors is also famous for its monthly disclosure reports, which tend to be sarcastic and a nice break from the traditional corporate boilerplate. What I like about Expeditors is its outstanding track record of steady increases in sales and earnings. Here’s a look at EXPD’s earnings-per-share over the past decade.
1995: $0.18
1996: $0.24
1997: $0.37
1998: $0.45
1999: $0.55
2000: $0.76
2001: $0.89
2002: $1.03
2003: $1.12
2004: $1.41
That’s very impressive growth. As an investor, I like seeing clear trends. Expeditors has already earned 74 cents a share for the first half of 2005, and is on its way to earning about $1.65 a share for the entire year. Next year, the company is expected to earn close to $2.00 a share. The company’s return-on-equity has about 21%-24% for the last several years. With a market cap of roughly $6 billion, Expeditors is a member of the S&P 400 mid-cap index.
The next earnings report is due on November 1. On a strict valuation basis, I would say that Expeditors is a bit pricey, but I’m not too concerned. Most of the best-performing stocks always appear slightly overpriced. The key is that the company has a great track record and shows no sign of slowing down.
EXPD.bmp
Click here to see my entire Buy List.

Posted by on October 4th, 2005 at 11:20 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.