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Landstar System Inc. Message Board

  • remembrbubl remembrbubl Dec 5, 2006 3:13 PM Flag

    justfinance - where are you? Your thoughts.

    justfinance, Masonperkins and I are wondering your take on the recent price drop and lowered guidance for Landstar?

    Are you out there?

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    • >>Fair enough?<<



      I'm just playing/joking around with ya, don't take any of it to heart. For the most part Yahoo Boards are a JOKE, but everyonce in a while you run across someone that knows what they are talking about...

      I am bullish LT on markets, however I do think we are nearing a ST top.
      Do a little DD on my long pick.

      Best of luck to you... justbuylstr

    • Hello everyone -- I haven't missed a thing. Listened to the conference call, not much of a surprise (I reference prior post "Story from Reuters"). And, although freight has been subdued and cheap, I was very surprised at how relatively good the guidance is -- a mean reduction of 7 percent -- explained by the growth in BCOs (drivers) and a higher ratio of listed loads being moved (you can list loads, but the probability of finding someone to move it can only improve with the addition of capacity -- in this case through the brokerage side of things). More encouragement from the reaffirmation of record low turnover in BCOs -- even in a tougher environment.

      As for the cause of all this...Gerkens says a moderating economy and better planning on the part of customers to avoid the premium pricing slapped on shipments made during peak season. All true. In the latest GDP report, inventories were up...and not because the consumer is lagging -- thank efficiency. But, believe me, management isn't just sitting around as the customer's behavior changes -- if inventories are up, or the customer would rather wait for cheaper available capacity -- we want to contract with them to provide the warehouse capacity. The plan with Landstar is to expand both vertically (warehousing, initiating services closer to the source -- international expansion eg. China, India) and horizontally (trucks, rail, ocean, air, expedited, etc).

      I would caution those with overly pessimistic appraisals to remember that companies (particularly Landstar) are not a constant quantity -- company growth occurs both by adding capacity (drivers), agents and customers. What I getting at is this: investment equations are rarely a linear function, there are a fair number of variables to consider -- macroeconomic growth could stall, but so long as Landstar continues to add customers, agents, and drivers -- they win.

      As for share price, you and Masonperkins have said everything. I did see a few 50,000+ share blocks go thru this AM -- more company buybacks, per usual on these dips. I think you can review the volume on yahoo's beta chart, it tells you the volume for every minute or so.

      Glad to read that you are all doing well. 2007 will be a year for working out the excesses, but organic company growth will continue to pull thru -- as proven by this quarter.

      • 2 Replies to justfinance2003
      • Insightful as always, just. Thanks. All good thoughts. I agree and will cautiously work the swings now that I watch this with some regularity.

        IMO, it's a good opportunity as long as warehousing and international growth is one of the keystones of expansion plans. It may not be the biggest producer on the list of Transports (or it may) - but solid growth is nothing to sneeze at.

        And as far as not hitting last year's numbers . . . only two named hurricanes this year (neither more than a belch) obviously had the gov't spending less $$ with Landstar. That to me was an anomaly and should not be factored in here. The gov't contacts and contracts are solid - but they will spike from time to time.

      • No disrespect guys... but I think you're kidding yourselfs a bit here.

        >>as Landstar continues to add customers, agents, and drivers -- they win.<<

        IF they are "adding customers, agents, and drivers"
        WHY are they guiding DOWN so much?

        WHAT possible incentive is there for investors to think the FUTURE is gonna be great when the company is telling us it SUCKS (ok SUCKS might be a strong word I admit) right now?

        This company is NOT cheap at these levels, and has told us GROWTH has slowed and gone FLAT. WHY would investors think the share price will appreciate FROM HERE, based on FLAT or LOWER guidance?

        I guess I just don't get it???

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