Celadon Group A RISK on Mexico and NAFTA

I was driving from Arkansas visiting my grandchildren and passed a truck with this name on the side. Well that was a new name to me. Then I began to notice several of them. My making money antenna registered it and I made a note to study the company. To my surprise that the company was fundamentally sound. So here is the study for your consideration. 


This is the public relations blurb on their web site. www.celadon.com


Celadon is one of the largest and most progressive transportation and logistics companies in North America. Founded in 1985, Celadon has grown continuously for over 28 years and now employs over 4,000 associates worldwide. We have the newest equipment operated by the most skilled drivers on the road; our expertise means reliability and dependability. As one of the top truckload carriers in North America, we have international resources strategically located within the United States, Canada, and Mexico. In addition to international business, Celadon also offers a range of truckload transportation services within the United States, including long-haul, regional, local and dedicated. Our facilities allow us to provide a total transportation solution. Celadon Logistics provides freight management services, less-than-truckload consolidation and freight brokerage services. Celadon Dedicated Services offers supply chain management solutions, such as warehousing and dedicated fleet services. You can count on us for solutions to all your transportation and logistics needs.

They acquired Tango Trucking in 2015, Teton Transportation in 2012, and FTL this year. They are a risk considering they receive most of their income from trips to and from Mexico or Canada because of NAFTA. 

How do they do they do with Better Investing standards?

1. Sales have grown 8% over the past 10 years and it is a small capitalization company.

2. Pretax profit on sales in 6% and just over the industry average of 5%. 

3. 12% earned on equity is under the industry average of 19%. This is a concern.

4. Historic earnings are 18% over the last 10 years. This is good.

5. The upside/downside ratio is really skewed at -13 to 1. It is really below the buy zone.

6. It pays a small dividend but less than half of the earnings per share.

7. It is in the low of the buy zone. 

This investment is a speculation. It is low. It is strong in the past. It is challenged to find drivers, adjust to the new environment created by the anti-Mexico rhetoric politically. A venture. 


We will buy 100 shares for our fantasy portfolio. 

WE paid $769.00 for 100 shares. 

CGI cost basis $769.00 value is $865.00 = +96.00 (01/08/2017)
STRC cost basis $7,719 value is $7,938.00 = +$219.00 
LULU cost basis $6,855.00 value is $6,827.00 = -$28.00
GNTX cost $1,856.00 current $2,052.00 .... +196.00
BNS paid $5,408.00 value $5,788.00 = +$380.00
TSCO paid $6,667 value $7,516.00. = + $849.00
KMX paid $5,444 value $6,540.00 = + $1096.00
LCI paid $3,238 value $2,225 = - $1,013.00
JLL paid $9,699 value $10,673.00 = + $974.00