Logistical disruptions have been a major area of concern for the trucking industry over the past year, especially with worsening inflation levels. However, overwhelming consumer demand has helped the sector to deliver positive returns to investors amidst an extended remote life culture, and this growth momentum is expected to continue.
Despite the challenging backdrop, the trucking industry is expected to rebound soon as demand for both luxuries and necessities continues to multiply. The growth momentum for stocks with solid financials is on an upturn. According to a Globe-News Wire report, the global advanced truck technologies market is expected to grow at a 7.6% CAGR during the forecast period 2022-2032.
So, we think it could be wise to add quality trucking stocks P.A.M. Transportation Services, Inc. (PTSI) and Daseke, Inc. (DSKE) to one’s watchlist now. They are trading below their 52-week highs but have significant upside potential. Moreover, these stocks are rated ‘A’ (Strong Buy) in our POWR Ratings system.
P.A.M. Transportation Services, Inc. (PTSI)
PTSI, through its subsidiaries, operates as a truckload transportation and logistics company in the United States, Mexico, and Canada. The Tontitown, Ark.-based company operates a fleet of approximately 2,013 trucks, including 355 independent contractor trucks and 6,994 trailers.
On Jan. 19, 2022, Joe Vitiritto, the company’s president, said “We made significant progress in the quarter and 2021 at PAM with profitable organic growth. The growth has allowed our team to offer creative capacity solutions to our customers in unprecedented times. Our drivers are owed a big thanks for how they navigated the many challenges that 2021 presented them both personally and professionally.”
For the fourth quarter, ended Dec. 31, 2021, PTSI’s operating revenue increased 49.9% year-over-year to $213.91 million. Its adjusted non-GAAP net income came in at $32.09 million, up 130% year-over-year, while its adjusted non-GAAP EPS was at $2.85, up 135.5% year-over-year.
Analysts expect PTSI’s revenue to increase 13.1% to $799.70 million in 2022. Its EPS is also estimated to increase 13.5% to $8.00 in 2022. In addition, it has surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 162.7% in price to close yesterday’s trading session at $76.19. It is currently trading 6.8% below its 52-week high of $81.77, which it hit on Nov. 16, 2021, and is also trading above its 50-day and 200-day moving averages.
PTSI’s POWR Ratings reflect its solid prospects. The company has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
In addition, it has an A grade for Sentiment and a B grade for Growth, Momentum, and Quality. PTSI is ranked #1 of 22 stocks in the A-Rated Trucking Freight industry. Click here to see the additional POWR Ratings for PTSI (Value and Stability).
Daseke, Inc. (DSKE)
DSKE provides transportation and logistics solutions focusing on flatbed and specialized freight in the United States, Canada, and Mexico. It operates through two segments, Flatbed Solutions: and Specialized Solutions. DSKE is based in Addison, Tex.
On Oct. 22, 2021, Jonathan Shepko, CEO, DSKE, said, “Once again, we demonstrated the strength of our operating model, effectively flexing our 'asset-right' fleet to service the needs of our customers in this unprecedented market. Prospectively, we plan to deliver meaningful value to our shareholders by continuing to leverage our scale and our differentiated capabilities, while also maintaining a keen focus on advancing our operational improvement initiatives.”
DSKE’s total revenue increased 13% year-over-year to $424.6 million in its fiscal third quarter, ended Sept. 30, 2021. Its net income came in at $19.7 million, up 71.3% year-over-year, and its EPS was $0.30, up 76.5% year-over-year.
Analysts expect DSKE’s revenue and EPS to increase 5.8% and 48.1%, respectively, year-over-year to $1.65 billion and $1.14 in fiscal 2022. Over the past year, the stock has gained 101.4% in price to close yesterday’s trading session at $11.50. It is currently trading 1.6% below its 52-week high of $11.69, which it hit on Feb. 2, 2022, and is also trading above its 50-day and 200-day moving averages.
DSKE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system.
DSKE has an A grade for Growth and a B grade for Value, Momentum, and Sentiment. Within the Trucking Freight industry, it is ranked #2. Click here to see the additional POWR Rating for Stability and Quality for DSKE.
PTSI shares were trading at $78.20 per share on Wednesday afternoon, up $2.01 (+2.64%). Year-to-date, PTSI has gained 10.13%, versus a -3.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
2 Momentum Stocks in the Trucking Industry to Add to Your Watchlist StockNews.com
