Marten Transport Ltd.MRTN

Morningstar Rating

Stock Research and Analysis

by Anthony Dayrit

When demand freezes up on the crowded waters of truckload trucking, Marten Transport stays above the ice by providing temperature-controlled freight services. Although this focus on perishable goods helps shield the firm from the chill that cyclical Read more

Bulls Say

Offering temperature-controlled services gives Marten a slight edge during a business downturn because during a slowdown in the overall economy, demand for perishable products is less vulnerable than for durable goods.

By installing auxiliary power units in about 96% of its company-owned fleet, Marten has reduced fuel consumption during mandatory driver rest periods. This lessens the impact of rising fuel prices on the firm's profits.

Marten's reputation in the industry as a premium service provider may result in the firm winning business from clients that require specialized temperature-controlled hauling. Read more

Bears Say

Marten possesses significant customer concentration--General Mills and Kraft account for 19% and 10% of overall revenue, respectively. The loss of these customers would put a large dent in the firm's portfolio.

Marten's operating metrics aren't particularly impressive because its operating ratio falls in the middle of the crowded pack of truckload operators. Returns haven't consistently exceeded the company's cost of capital.

Like other asset-based truckload carriers, Marten is mired in an industry that lacks rational pricing. During a business downturn, pricing wars are likely to escalate as competitors drop rates in order to utilize their assets, leading to lower industrywide profitability. Read more

Strategy

Marten targets customers which require the high level of service necessary to ship temperature-sensitive goods. The company makes significant capital expenditures annually because it maintains a relatively Read more

Management

Like a number of our other truckload carriers (Knight, Heartland, and Werner Enterprises WERN), Marten is a family-controlled institution. Randolph Marten assumed the CEO role in 1993 after the passing of his father, founder Roger Marten. Although we Read more

Profile

Marten Transport is a truckload carrier specializing in hauling temperature-sensitive goods. The company obtains 85% of its truckload revenue from temperature-controlled Read more

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