Shares of C.H. Robinson CHRW have shed 9.5% of value over the past six months due to multiple headwinds like high costs and debt burden.
Six-Month Price Performance
Apart from the aforementioned negatives, frequent management changes at this transportation company do not bode well as far as investors' confidence in the stock is concerned.
In February 2019, C.H. Robinson promoted its current chief operating officer (COO), Robert Biesterfeld, to the position of chief executive officer (CEO). Biesterfeld will replace the incumbent chairman and CEO, John Wiehoff, on May 9. (Read more : C.H. Robinson Appoints Robert Biesterfeld as New CEO ).
Even before Biesterfeld could start assuming his new responsibilities, C.H. Robinson unveiled another update, reflecting its management's lack of stability. This time, the company announced that its chief financial officer (CFO), Andrew Clarke, will quit his post effective Mar 31, 2019. However, there are no intimations regarding where Clarke is headed to. Following this decision of a sudden departure of its CFO, C.H. Robinson has started looking for a suitable replacement.
Dealing with a spate of management changes apart, C.H. Robinson continues to grapple with escalating operating expenses. In 2018, operating expenses increased 12.6% to $1,793.2 million, mainly due to rise in personnel expenses and higher average headcount.
We remain concerned about the company's high indebtedness as well. Long-term debt as of Dec 31, 2018 was $1,341.35 million compared with $750 million at the end of 2017.
In view of the challenges hounding the company, it remains to be seen whether the new CEO and CFO can turn things around in the company's favor and offset its disappointing stock price performance.
Zacks Rank & Other Key Picks
C.H. Robinson carries a Zacks Rank #2 (Buy). Investors interested in the Zacks Transportation sector may also consider other top-ranked stocks like Azul AZUL , SkyWest SKYW and Frontline FRO , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Azul outshined the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average beat being 63.1%. Meanwhile, shares of SkyWest and Frontline have rallied more than 23% and 25%, respectively, over the past three months.
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