Stock Trade of the Week: Expeditors International of Washington (EXPD)

Expeditors International of Washington (Nasdaq: EXPD) is a transportation company that provides logistics services all over the globe. The company offers airfreight and ocean freight services, freight consolidation services, order management, and customs brokerage.

The company’s client roster includes retailers, wholesalers, electronics companies, and industrial and manufacturing companies. EXPD is headquartered in Seattle, Washington and was founded in 1979.

This is actually the second time I am recommending Expeditors International.

The first time was in March ’18 when the stock was trading around $62.

It rallied over 25% in the first few months after it was suggested back then and has continued to trend higher with some rallies and downturns throughout the overall long-term trend.

The company has seen earnings grow at a rate of 15% per year over the last three years and they grew by 5% in the most recent quarter.

Sales grew by 9% in the most recent quarter and they have grown by 12% per year over the last three years.

The company’s return on equity is at 31.1% and the profit margin is at 10.1%, both of those figures are average or better. It is also worth mentioning that the company doesn’t have any long-term debt. With the global economy slowing, companies with little to no debt should be able to weather the storm a little better.

The sentiment toward Expeditors International is rather bearish with 12 out of 14 analysts covering the stock rating the stock as a “hold” or “sell”. Only two “buy” ratings among the lot. The short interest ratio is also showing signs of pessimism with a reading of 5.9.

We see on the chart how the low weekly closes connect very nicely to form an upwardly sloped trend line. The stock has bounced off of the trend line on several occasions with each bounce providing a sizable gain for investors. The stock is just above the trend line currently, but it is close enough that I think we can take advantage.

Suggested strategy: Buy EXPD with a maximum entry price of $72. I would set a target of at least $90 over the next six to nine months. I would suggest a stop loss at the $65 level.

— Rick Pendergraft

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