Monday, January 30, 2006

Hit #78

Central Freight Lines (CENF), the trucking company, agreed to be acquired for $2.25/share, a 39.7% premium over my average cost of $1.61/share.

Given that the stock has lost 70% of its value over the last few months, this is a real cheap buy. An activist shareholder fighting for a better price is badly needed to counter such deals.

The buyer, the Moyes family, also owns Swift (SWFT) trucking.

This buyout comes just a week after another trucker, SCS Transportation (SCST), announced that it may be looking to sell the company. I own SCST shares, which have now gained around 70% since I bought a few some months ago.

Since I cited trucking as an attractive sector, I have bought shares in various trucking companies, many of which have seen renewed interest.

Among the ones I bought, Covenant (CVTI), Sirva (SIR) and US Xpress Enterprises (XPRSA) are worth watching and adding positions in.

Special carriers like temperature-controlled goods experts, Marten (MRTN) and Frozen Food Express (FFEX), are also likely targets down the road. I own a few Frozen Food Express shares and will continue buying at current prices.

In a recent post on Arizona, I touched upon trucking/rail and logistics in general. I recently opened a position in ABX Air (ABXA), an airport-to-airport freight provider that has seen strong insider activity.

Previous hit - Sports Authority (#77)


Post a Comment

<< Home