by Travis Johnson, Stock Gumshoe | October 10, 2012 1:55 pm
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Surprising big turn from the analyst(s) at Goldman Sachs today, they moved it from “sell” to “conviction buy”, which you almost never see, particularly because there’s been no news or earnings announcement to spur the change. The call seems largely based on some big picture stuff about a bottoming out in global trade flows (the other things they cited, potential for dividend increases and buybacks, have been there for years, and they’ve consistently raised the dividend, that’s not new).
I don’t know if trade volumes will pick up now or if we’re at the bottom, I’m sure the GS forecasters are better at those guesses than I am, but bigger air freight volume (that’s higher margin stuff) would certainly help in the near term.
Good call from GS, turns out.
Earnings came out today — and were worse than analysts expected on both top and bottom line, so naturally the stock is up 3%+. That’s part of what I like about this company — they don’t care what analysts think, they manage the company based on customer demand, and demand was down for air freight this year (fewer heavy computers shipped, more light smartphones shipped is part of the reason) so they cut costs and worked around it.
Their other segments did fine, and margins were resilient, and their basic summary in the earnings release was: this has been a lousy year, but our company is still awesome.
Which I think is a fair assessment. Happy to keep holding and watching the sloooow compounding as they gradually raise the (currently very small) dividend and make good choices for their customers, employees and shareholders.