Con-way Inc.CNW

Morningstar Rating

Stock Research and Analysis

by Anthony Dayrit

Con-way has made significant strides to improve operations amid a period of plunging freight volume, recently consolidating its three regional less-than-truckload (LTL) networks into one unified system. When combined with the firm's truckload and logistics Read more

Bulls Say

Con-way's LTL restructuring will streamline operations, eliminate redundancies, and reduce future overhead costs, which is likely to bolster long-term profitability.

Con-way's expansive LTL network has positioned 290 service centers near clients, which gives the firm an edge in providing rapid, efficient service.

Nonunionized driver-salespeople perform multiple functions at a lower cost than if Con-way had to hire additional employees to perform each task. Read more

Bears Say

Menlo, Con-way's logistics operation, possesses significant customer concentration; its top four customers generate around 40% of the segment's total revenue. Loss of one of these key clients would stunt top-line growth.

Although Con-way's logistics expansion should help reduce the company's dependence on asset-intensive operations, Menlo has historically generated lower margins than the company's trucking divisions'.

The firm faces intense competition across its operations because both the truckload and logistics industries are highly fragmented. In addition, Con-way's LTL segment competes with industry heavyweights FedEx FDX and United Parcel Service UPS. Read more

Strategy

Con-way aims to set itself apart in a relatively commodified industry by providing high-quality, efficient services to customers. The firm's 290 LTL freight service centers help Con-way canvass more Read more

Management

We think Con-way's management team has taken positive strides to better position the firm for the long haul. Although a number of the executive officers were promoted to their current positions within the past four or five years (CEO, CFO, general counsel, Read more

Profile

Con-way is an asset-based less-than-truckload freight carrier, providing day-definite delivery services to manufacturing, industrial, and retail customers. The firm generates Read more

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