This trucking company beat analysts’ estimates by $0.02 in its last quarter, and Wall Street is expecting double-digit growth next year.
Marten Transport Ltd. (MRTN)
From 2 for 1 Stock Split Newsletter
Small trucking company Marten Transport Ltd. (MRTN) is in the temperature-sensitive trucking business, primarily moving perishable food products all across North America. This niche has provided a very steady business in a field that others are reluctant to enter, probably because it’s just harder than ordinary trucking.
Not only does Marten do it well, it seems to also run its business differently and better than its competitors. The standout numbers are in the balance sheet—zero long-term debt to equity where the average for the industry is 178%. This could be important over the next few years.
Other good numbers include a price-to-book ratio of 1.95 and an enviable free cash flow. Not all of Marten’s numbers are great. Earnings, growth, and profits are solid but not impressive. The strength of this small-cap, family controlled company is in its conservative approach to business, a virtue in short supply, in my opinion.
Marten Transport announced a 5 for 3 split in June and delivered the new shares on July 7. A 5 for 3 split is not as strong as a 2 for 1 split but it’s better than a 3 for 2 split. But what makes me think it’s good enough for the 2 for 1 portfolio when, with very, very few exceptions, I’ve adhered to the “2 for 1 only” rule?
First and foremost, a stock split announcement separates a company from the list of thousands of stocks traded on the major exchanges and puts it on the list of only a select few names that possess the “Stock Split Advantage”. Because I can’t find another 5 for 3 split, I can’t offer up an example, but my instincts lead me to think this is still a strong signal from the board that they believe future prospects for the company are excellent.
The stock split is really just the first screen of more than a dozen that I use to find the companies that eventually end up in the 2 for 1 portfolio. In spite of the stock split advantage and all the other criteria used to select our 30 stocks, there will always be a few misses, so I’m not worried bending the 2 for 1 only rule will put the portfolio in grave jeopardy.
Neil MacNeale, 2 for 1 Stock Split Newsletter, www.2-for-1.com, 408-210-6881, August 2017