Knight Transportation Inc.KNX

Morningstar Rating

Stock Research and Analysis

by Anthony Dayrit

Knight Transportation sets itself apart from the fragmented truckload freight crowd by running one of the tightest ships in the business. In the asset-intensive world of truckload shipping, controlling costs is king, and with its solid operating ratio Read more

Bulls Say

Compared with other truckload carriers, Knight's customer concentration is low--no customer represents more than 5% of revenue.

Knight generates an impressive operating ratio, averaging around 82% during the past 10 years. This figure is similar to that of another efficient operator, Heartland Express HTLD.

The firm's refrigerated cargo operations are less exposed to slowdowns in economic activity than dry-van shipping. Read more

Bears Say

Competition only intensifies during times of soft demand, since overcapacity leads to firms' bidding rates down as they attempt to keep tractors and trailer assets utilized.

Although Knight's expansion into refrigerated and brokerage services provides diversification, these initiatives currently drag on dry-van margins.

Minority shareholders possess limited voting influence, since the Knight family controls about one third of outstanding shares. Read more

Strategy

Knight's primary strategy is to add new service centers, then expand market share by building density within its existing network. The company also looks to diversify its operations outside standard Read more

Management

We think the Knight family has done a decent job with regards to corporate governance, but investors should be aware of its strong influence and hefty voting power. The family occupies several significant roles within the company: The CEO and COO are Read more

Profile

With headquarters in Phoenix, Knight Transportation is a $766 million asset-based truckload freight carrier. The company focuses on short- to medium-length hauls, operating Read more

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