How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Knight-Swift Transportation Holdings (KNX) ten years ago? It may not have been easy to hold on to KNX for all that time, but if you did, how much would your investment be worth today?
Knight-Swift Transportation Holdings' Business In-Depth
With that in mind, let's take a look at Knight-Swift Transportation Holdings' main business drivers.
Knight-Swift Transportation Holdings Inc. is the largest truckload carrier in North America. The company based in Phoenix, AZ, also provides transportation solutions and aims to grow through mergers and acquisitions. It serves customers throughout North America, providing them with numerous efficient and low-cost truckload transportation, intermodal and logistics services.
On Sep 8, 2017, Knight Transportation, Inc. merged with Swift Transportation Company.
In an environment-friendly measure, Knight-Swift intends to reduce carbon emissions generated by its fleet by 50% over the next 15 years (2035).
The company reports primarily through four segments:
Truckload Segment: This segment includes revenues from Knight Trucking, Swift Truckload, Swift Dedicated and Swift Refrigerated segments. The consolidated segment offers dry van, refrigerated and drayage services. Customers usually pay a pre-decided rate per mile or per load for availing the trucking services. The segment also generates revenues by charging for tractor and trailer detention, loading and unloading activities, dedicated services and other specialized services as well as through a fuel surcharge.
Logistics Segment: This segment offers logistics, freight management and other non-trucking services to customers. The unit also generates revenues by offering specialized logistics solutions such as origin management, surge volume, disaster relief, special projects and other logistic needs.
Intermodal Segment: This segment generates revenues by moving freight over the rail in containers and other trailing equipment. Revenues are also generated from drayage to transport loads between railheads and customer locations. The segment enables better customer service in long haul lanes and minimizes the company’s investment in fixed assets.
Less-Than-Truckload (LTL) Segment: This segment consists of the operations of AAA Cooper Transportation (acquired in July 2021) and RAC MME holdings (acquired in December 2021).
During 2021, the Truckload, Intermodal, Logistics and LTL segments contributed 68.3%, 7.8% and 13.6% and 6.6% to the top line, respectively.
The company’s fiscal year coincides with the calendar year.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Knight-Swift Transportation Holdings ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in August 2012 would be worth $4,703.33, or a 370.33% gain, as of August 16, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
The S&P 500 rose 205.73% and the price of gold increased 5.84% over the same time frame in comparison.
Going forward, analysts are expecting more upside for KNX.
Robust revenues at the Logistics segment (up more than 88% year over year in the first half of 2022) owing to increase in load count and revenue per load are driving Knight-Swift's top line. Owing to favorable freight market conditions and higher trucking rates, KNX provided an upbeat earnings guidance for 2022. KNX now expects adjusted earnings per share in the range of $5.30-$5.45 (previous view: $5.20-$5.40) for the ongoing year. Its measures to reward its shareholders are encouraging. During the June quarter, KNX returned $150 million to its shareholders in the form of share repurchases and $19.6 million as dividends. However, chassis allocations and network fluidity are hurting its intermodal volumes. High costs related to driver wages, equipment, maintenance and fuel are pushing up the operating expenses, limiting bottom-line growth.
Over the past four weeks, shares have rallied 16.66%, and there have been 9 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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