Prolonged low rates = time to short trucking stocks?

Aubrey McClendon would ride that wagon. You know what happened to that wagon?

TA

 

I try to stay away from truck stocks.I still have a lot of Consolidated Freightways stock,would you like some,lol.On the good side though,I bought Landstar stock along time ago,still have it,and in the long run it has done well so far,but like they say it's not worth anything till you sell it.
And you Landstar guys and gals,work harder,but be safe!

 

Short swift. Horrible P/E ratio and 309% debt/equity, horrendous....
Plus they will always have a driver turnover problem.

Go long: aapl, vz, crto, fl, cat, hpq.

 

If I would have followed my own advice and pulled the trigger, here's how I would have done:


Short USA Truck: 26.67 April 27, 17.78 today -- +33.3%
Short PAM: 59.52 April 27, 39.08 today -- +34.3%
Short Celadon: 26.20 April 27, 18.2 today -- +30.5%
Short Covenant: 33.31 April 27, 21.55 today -- +35.3%

Equal weighting: +33.35%


Hedges:

Long HTLD: 21.15 to 19.67 -- -1.48%
Long LSTR 64.09 to 65.13 -- +1.62%
Long EXPD: 46.24 to 47.49 -- +2.70%
Long KNX: 30.34 to 24.91 -- -17.9%
Long WERN: 27.98 to 25.56 -- -8.65%
Long MRTN: 22.87 to 17.01 -- -25.6%

w/ equal weighting: -8.22%



with shorts equal to longs: +25.13% (less any frictional costs)


I, of course, did not follow my own advice. Having never shorted a stock, I was surprised to discover Scottrade charges you interest the entire time you hang on to a shorted stock and, even more surprising, they don't always know how much interest they will charge until after you've gone ahead with the short...

 

You pay any dividends or special dispersements on the stock to the original owner. If its a margin short there is interest on the margin amount.

One caution on lightly held stocks is that if the original owner liquidates their position to someone outside of the brokers pool then you get hit with a forced close on your position.

That's one reason leaps/options are sometimes a better way to go.

TA

 

Short selling is a great way to make money off the market in down times however, it takes nerves of steel. Where your losses on a long position can only go so far until they hit the floor a short can be infinite loss. In 08 I made good money shorting but did it rather through quick round trip sales with small profits. Id rather pay broker fees and sleep at night than be sitting on some position praying it will come back around. I think in these days big swings in the stock market are pure manipulation just like in 08. Much easier for the long nose wall street folks to make money off of large swings up or down than it is to sit back and wait for it to creep up over a life time like common belief.

 

I work for Aubrey right now....

 

Rc, I know it's hard to believe, but it IS the guys working off the load boards that pull the cheap stuff. for every guy like you that knows his numbers and won't work for cheap, there is a thousand guys that have no idea how much it cost to run their truck and will pull that buck thirty a mile freight and swear they are making money.

 

Looked up what it would have cost to hold the short positions that long: 22.5% So the net gain would have been only 2.6% (as usual, only the broker makes any real money)

 

Got to look at their PE ratio typically you want the ratio to be between 10 - 30 anything higher than that and the companies shares are overvalued and will come down in a big dive one of the reasons we've had the current market correction is that alot of blue chip stocks were getting around that overvalued ratio this correction excuse the pun has "corrected" that issue