Quality Distribution Inc.
) has beaten the Zacks Consensus Estimate in five of the last six
quarters and matched in the remainder, resulting in an average
earnings surprise of 35.91%. The strong surprise along with high
future earnings growth potential helped this chemical bulk
truckload transporter become a Zacks #1 Rank (Strong Buy) on May
On May 7, 2012, Quality Distribution reported first quarter
earnings per share of $0.26, which beat the Zacks Consensus
Estimate by 73.3% and improved 116.7% over last year's $0.12.
Total operating revenue improved 7.87% to approximately $192
million, which also surpassed the Zacks Consensus Estimate by
1.75%. Increased revenue and profitability in the energy logistics
business helped the company post solid performances.
The stock price rose 13% in the session following the report.
Quality Distribution focuses on strategic acquisitions in order to
expand its market share in the energy-related transportation
segment. On June 4, 2012, the company completed the acquisition of
certain assets of Wylie Bice Trucking LLC, strengthening its
foothold in the unconventional oil and gas industry within the
Bakken shale region.
Strong Earnings Estimate Revisions
Estimates for Quality Distribution have been rising over the last
60 days. The Zacks Consensus Estimate for 2012 is up 8.8% to 99
cents, while the guidance for 2013 has advanced 13.3% to $1.28. The
current Zacks Consensus Estimate for 2012 indicates a 40.71%
year-over-year growth. Similarly, the current estimate for 2013
implies year-over-year growth of 29.95%.
Valuation Looks Attractive
Quality Distribution is currently trading at attractive multiples
with respect to most of the valuation metrics. The stock currently
trades at a forward P/E of 10.46x, implying a discount of nearly
42% compared with the peer group average of 14.85x. The current PEG
ratio is 0.62, a 38% discount to the benchmark of 1.0 for a value
stock. As a result, the long-term earnings growth projection of
42.5% is currently priced at a discount.
Chart Shows Growth Potential
The one-year stock price chart of Quality Distribution finds
support at around $8.3 and resistance at $14.54. The current stock
price of Quality Distribution is indicating a downside risk of
approximately 19.4%, while providing an upside potential of nearly
41.2%. This Zacks #1 Rank (Strong Buy) stock is showing solid
Quality Distribution Inc. was founded in 1984. Formerly, known as
MTL Inc., the company changed its name to Quality Distribution in
1999. The company is the largest chemical bulk trucker and largest
intermodal tank container and depot service provider in North
QUALITY DISTRIB (QLTY): Free Stock Analysis
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