2013 Good Year For Trucking Stocks

Investors in three of the state’s four trucking firms more than doubled their investments for the year.
USA Truck, which fought off a takeover bid, was the best performing Arkansas stock, with its value more than tripling last year. Arkansas Best’s stock rose more than 250 percent, and P.A.M. Transportation Services doubled.

Even J.B. Hunt Transport Services, the fourth trucking firm among Arkansas public companies, rose almost 30 percent for the year.

“Generally, the trucking industry is a very stable long term investment,” said Lane Kidd, president of the Arkansas Trucking Association.

Two of the Arkansas trucking firms - USA Truck and P.A.M. - have been in turnaround periods the past couple of years, Kidd said.

“P.A.M. is doing well with Dan Cushman as president, implementing new programs that are working,” Kidd said. “And USA Truck hired John Simone, who has great experience doing the same thing.”

USA Truck also has benefited after spurning a hostile takeover attempt by Knight Transportation, said Bob Williams, senior vice president and managing director of Delta Trust Investments Inc. in Little Rock.

On Sept. 26, Knight offered to buy USA Truck for$9 a share, about 40 percent more than the price it closed at the previous day. That began a steady increase in the stock price, peaking at $16.07 on Nov. 18.

Despite the takeover attempt, USA Truck’s efforts to enhance shareholder value have been effective, Williams said.

“At least one entity, Baker Street Capital, believes the stock is undervalued and has accumulated significant positions [in USA Truck],” Williams said.

Baker Street said in October and November filings with the Securities and Exchange Commission that it now owns 1.4 million shares of USA Truck, about 13.3 percent of the Van Buren-based firm, Williams said.

Arkansas Best benefited in 2013 from expected reductions in wage and employment benefit expenses after a five-year labor agreement was signed, Williams said.

In all, the stocks of five Arkansas companies more than doubled in 2013 - USA Truck, Arkansas Best, Home Banc-Shares, Acxiom and P.A.M.

Home BancShares - which owns Centennial Bank offices in Arkansas, Florida and Alabama - closed on the largest acquisition of an Arkansas bank by an in-state institution last year with its purchase of Liberty Bancshares of Jonesboro. The purchase doubled the Centennial Bank offices in the state and made Centennial the second-largest bank in the state.

“[Home BancShares’] method of assimilating strong community bank franchises to fuel growth continues to be well received by [Wall Street],” Williams said.

The Arkansas Index, a price-weighted index that tracks the largest public companies based in the state, was up 35 percent for the year.

All but three of the major Arkansas public companies posted gains in 2013.

The losers were First Federal Bancshares, down 11 percent, Deltic Timber, down almost 4 percent, and Windstream, down 3.6 percent.

First Federal’s stock price has been affected by concerns about competition and market share for the Harrison-based bank, Williams said.

Windstream’s executives “continue to express confidence that the company will generate stable free cash flows and maintain its dividend payout ratio,” Williams said. Windstream pays an annual dividend of $1 per share, one of the highest in the industry.