Forward Air Corp (NASDAQ:FWRD)

CAPS Rating: 3 out of 5

The Company is a provider of time-definite surface transportation and related logistics services to the North American deferred air freight market.


Player Avatar weiwentg (99.16) Submitted: 1/19/2007 12:50:14 PM : Outperform Start Price: $31.95 FWRD Score: +7.90

OK, so FWRD is down 13% since I picked it. But I'm not worried, because this company has a wide moat, dominating its little niche in the transport industry.

Like Expeditors' International (EXPD), another of my favorite transport firms, FWRD is asset-light. It does not own trucks, it contracts with independent owner-operators. It consolidates less-than-truckload shipments and sends them on their way. all their 81 terminals are near airports, so they've cornered the good locations. and they have the flexibility to increase or decrease their contracts in good or bad times. others have tried to enter the market but failed. FWRD took losses for several years while building up its infrastructure, and now it has a scale that entrants won't be able to match easily. rivals also haven't been able to match their quality of service. FWRD offers considerable savings over traditional freight carriers, and they could potentially pick up international business, as international carriers aren't permitted to deliver beyond gateway cities in the US.

The Columbia Acorn fund, run by the renowned Wanger Asset Management, owns 6.57% of outstanding shares (making up less than .5% of the fund). FWRD has paid a small dividend since early 05, and they bumped it up in 06.

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