Get Moving With Trucking Stocks

While the price of oil has dropped nearly 70% from its July 2008 high of $147, trucking stocks have remained significantly lower than their 52-week highs. If the economy turns around in 2009, and that's a big "if", trucking stocks are poised to perform quite well. In order to find trucking stocks that will yield big returns, while minimizing risks if the economy doesn't turn around, there are certain criteria investors can use to separate the good from the bad: dividend yield, insider ownership, and high cash / low debt.

• Dividend Yield - I rarely invest in stocks that don't pay a dividend. This is absolutely the case with trucking stocks, especially in these dire economic times. Dividends indicate many things about a company, but the most important two are that the company is on relatively solid financial footing and that the management is shareholder friendly. So, look for companies that pay a dividend. (For more on why this lucrative distribution is so important, read The Importance Of Dividends.)
  
  
• Insider Ownership - Along with dividends, insider ownership signals that management is likely to be shareholder friendly, as they are also shareholders. Insider ownership is also an excellent gauge of confidence that management has in the company. Nothing, not even a slick management team, tells the story of insider confidence better than a percentage of insider ownership of the outstanding shares. Lastly, when insiders own a significant portion of the company, they are far more willing to put in the extra effort to gain an edge over the competition. (To see how keeping tabs on insiders can pay off, read Delving Into Insider Investments.)
  
  
• High Cash / Low Debt - In times like these, there's no telling how long the economic downturn will last. There is, however, plenty of evidence that suggests companies with low debt will survive for a lot longer.

Now that I've defined the criteria for finding potential investments in the trucking industry, let's find out who fits the bill.

The good
Out of the five trucking stocks I analyzed, three look like winners when I apply the above criteria.

Get Free Stock Analysis By Email