A resistance level has formed in the chart of Expeditors International of Washington and a breakout may occur soon.
Expeditors International of Washington Inc. (EXPD) is a third-party logistics provider, mainly focused on international freight forwarding. It employs sophisticated IT systems and contracts with airlines and steamship carriers to move customers' freight across the globe.
EXPD is benefiting from an uptick in airfreight revenues, which rose close to 50% in the first three quarters of 2020. Due to the pandemic driven cancellation of many passenger flights that typically carry freight, there was an increased usage of charters to handle customer freight needs.
The company has a healthy balance sheet with a $1.5 billion cash balance as of the end of the latest quarter, compared with only $357 million in long-term debt. EXPD also has a strong current ratio of 2.3 and a high return on equity of 25.4%.
In terms of growth, the company has a three-year revenue growth rate of 10.5% and a three-year earnings growth rate of 15.9%. EXPD is fairly valued with a trailing P/E of 25.71 and a forward P/E of 23.42.
EXPD’s stock has shown strong near, mid, and long-term momentum, which has resulted in a “Strong Buy” in our POWR Ratings system. This is reflected in its 1-year price chart below with added notations:
Like most stocks, EXPD took a dive in February/March of 2020, only to see a strong recovery thereafter. However, the stock ended up stalling at the same $95 resistance (red) several times since September. A solid close above that $95 mark should lead to much higher prices for EXPD.
The possible long position on the stock would be on a breakout above the $95 resistance level with a protective stop placed under it.
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EXPD shares were unchanged in premarket trading Tuesday. Year-to-date, EXPD has gained 22.52%, versus a 16.09% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock.
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