➡️ This is a step-by-step stock review to determine if Expeditors International of Washington (EXPD) stock is a good buy. In this article, we’ll help you complete a 4M checklist. The 4Ms include the MOS (Margin of Safety), Meaning, Moat, and Management.
Table of Contents
- Expeditors Company History
- MOS
- Meaning
- Moat
- Management
- News
- 4M Summary
- Is Expeditors stock a good buy?
➡️ Goal: It’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition
Expeditors is a logistics and freight forwarding company with over 340 locations around the globe that provide comprehensive supply chain solutions to businesses worldwide. Here is the company history.
1979:
- Founded by Peter Rose, a former executive of the multinational freight forwarder, Fritz Companies.
- Initially established as a branch office of a customs house broker in Seattle, Washington.
1981:
- Officially incorporated as Expeditors International of Washington.
- Began offering air and ocean freight forwarding services.
1984:
- Opened its first international office in Taipei, Taiwan.
- Expanded services to include customs brokerage and distribution.
1990:
- Completed an initial public offering (IPO) and began trading on the NASDAQ Stock Market under the ticker symbol EXPD.
1993:
- Expanded operations in Europe by acquiring freight forwarding company Rostransgroup, establishing a presence in Russia.
1995:
- Entered the Asian market by acquiring Shanghai-based freight forwarder, Transcon Shipping.
1996:
- Established a presence in South America through the acquisition of LIT Cargo, a Chilean freight forwarding company.
1999:
- Opened its first office in Africa, located in Johannesburg, South Africa.
2000:
- Expanded into the Middle East by opening an office in Dubai, United Arab Emirates.
2001:
- Peter Rose stepped down as CEO, and Jeffrey S. Musser assumed the position.
2006:
- Achieved $5 billion in annual revenues for the first time.
2010:
- Opened a new state-of-the-art headquarters building in Seattle.
2011:
- Appointed Peter J. Rose as the new CEO, while Jeffrey S. Musser became the Vice Chairman of the Board.
2014:
- Expanded its footprint in Europe through the acquisition of the OceanAir agency network, strengthening its presence in the United Kingdom.
2016:
- Celebrated its 35th anniversary as a leading global logistics provider.
2017:
- Opened its first office in Myanmar, expanding its network in Southeast Asia.
2018:
- Completed the acquisition of Fleet Logistics, a Europebased provider of logistics and supply chain solutions.
2019:
- Celebrated its 40th anniversary.
- Acquired the digital customs broker, Fleet Solutions Provider, to enhance its technology capabilities.
2021:
- Expanded its footprint in Latin America by acquiring the fullservice logistics provider, Tigers Limited.
2022:
- Continued to grow its global presence by opening offices in Argentina, Finland, and the Philippines.
2023:
- Ongoing commitment to delivering innovative supply chain solutions, leveraging technology, and expanding its global network to serve a wide range of industries.
Expeditors International of Washington has consistently adapted to the evolving needs of the logistics industry, expanding its global reach and offering comprehensive services to meet the diverse requirements of its customers.
➡️ Goal: When you look at a stock, the first step is to look at the financials. Fortunately, Tykr does this step for us automatically. A stock is either classified On Sale (Potential Buy), Watch (Hold), or Overpriced (Potential Sell). The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make. To determine if a stock is a definitive “Buy” or “Sell”, it’s wise to complete a 4M checklist.
- Summary: On Sale
- Score: 95/100
- MOS: 90%
- Share Price: $112
- Fair Value: $563
How does Expeditors International of Washington make money?
➡️ Goal: It’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Expeditors International of Washington is a global logistics company that generates revenue through various activities and services in the supply chain industry. They are a company that doesn’t own any planes, ships, or trucks. Essentially, they are the service provider that helps coordinate the logistics of moving products from location A to location B.
Here’s a summary of how Expeditors makes money:
- Freight forwarding:
- Offers air, ocean, and ground freight forwarding services.
- Facilitates the movement of goods across international borders.
- Earns revenue by charging fees for arranging shipments, documentation, and customs clearance.
- Customs brokerage:
- Provides customs clearance services for imported and exported goods.
- Ensures compliance with customs regulations and facilitates smooth clearance processes.
- Generates revenue by charging fees based on the value of goods and services provided.
- Warehousing and distribution:
- Manages warehouses and distribution centers worldwide.
- Offers storage, inventory management, and order fulfillment services.
- Earns revenue through warehousing fees and value-added services like kitting and labeling.
- Transportation management:
- Optimizes transportation networks for clients.
- Coordinates and manages transportation activities, including carrier selection and route optimization.
- Generates revenue through fees for transportation management services.
- Project cargo and specialized services:
- Handles complex logistics projects, such as oversized or high-value cargo.
- Offers specialized services tailored to specific industries, such as healthcare or aerospace.
- Earns revenue by providing customized solutions and value-added services.
- Information technology solutions:
- Develops and provides technology platforms for supply chain management.
- Offers software solutions, including transportation management systems and visibility tools.
- Generates revenue through software licensing, maintenance fees, and consulting services.
- Insurance and other ancillary services:
- Provides cargo insurance coverage to protect clients’ shipments.
- Offers additional services like trade consulting, compliance, and risk management.
- Earns revenue through insurance premiums and fees for ancillary services.
- Other revenue streams:
- Miscellaneous income from sources like document handling fees, currency exchange, and interest on cash and investments.
- value-added services such as packaging, labeling, and quality control inspections.
➡️ Goal: It’s important to understand who the competitors are and how their financials rank against this company. Try to find 5 other competitors to rank against based on Score. The best way to find competitors is to Google “XYZ competition” and replace XYZ with the company name. You can also go to Tykr and click on the “Similar Stocks” tab on each stock to see similar companies in the same industry.
Expeditors (EXPD)
- Summary: On Sale
- Score: 95/100
- MOS: 90%
- Share Price: $112
- Fair Value: $563
Top 5 Competitors of Expeditors International of Washington
C.H. Robinson Worldwide Inc. (CHRW)
- Provides a wide range of logistics services, including freight transportation, sourcing, and information services. They have a strong presence in North America and expanding globally. They offer customized supply chain solutions and technology-driven logistics management.
- Summary: Watch
- Score: 61/100
- MOS: 0%
- Share Price: $100
- Fair Value: $106
- Revenue: $24.7B
XPO Logistics Inc. (XPO)
- A global provider of transportation and logistics services, including freight brokerage, supply chain management, and last-mile delivery. Operates across various industries, including e-commerce, retail, healthcare, and aerospace. Known for its advanced technology solutions and expertise in optimizing supply chains.
- Summary: Overpriced
- Score: 33/100
- MOS: 0%
- Share Price: $47
- Fair Value: $38
- Revenue: $7.72B
Kuehne + Nagel International AG (KHNGF)
- One of the world’s leading logistics companies, specializing in sea freight, airfreight, contract logistics, and overland transportation. Provides end-to-end supply chain solutions for industries like automotive, pharmaceuticals, and retail. Focuses on digitalization and sustainability initiatives to enhance operational efficiency.
- Summary: On Sale
- Score: 78/100
- MOS: 90%
- Share Price: CHF262
- Fair Value CHF1,223
- Revenue: CHF39.4B
DSV Panalpina A/S (DSDVF)
- Offers comprehensive logistics solutions, including airfreight, ocean freight, road transport, and contract logistics. Operates globally with a strong presence in Europe and expanding in Asia and the Americas. Provides industry-specific solutions, including project logistics, automotive, and healthcare.
- Summary: On Sale
- Score: 61/100
- MOS: 90%
- Share Price: kr1,319
- Fair Value: kr6,630
- Revenue: kr235.6B
UPS Inc. (UPS)
- A global leader in package delivery and supply chain management services. Offers a broad range of logistics solutions, including air and ocean freight forwarding, customs brokerage, and contract logistics. Invests heavily in technology and automation to enhance efficiency and customer experience.
- Summary: On Sale
- Score: 95/100
- MOS: 90%
- Share Price: $168
- Fair Value: $938
- Revenue: $100B
➡️ Goal: It’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. As investors, we should invest in CEOs with humility and integrity. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
Jeffrey S. Musser served as the President and CEO of Expeditors International of Washington, a global logistics and freight forwarding company headquartered in Seattle, Washington. He assumed the role of CEO in March 2014. Prior to becoming CEO, Musser held various executive positions within Expeditors, showcasing his extensive experience in the industry.
Musser began his career with Expeditors in 1984 as a Regional Sales Manager in Dallas, Texas. Over the years, he took on increasing responsibilities within the company, including managing the Dallas District and serving as the President of the Southwest Region. Musser’s contributions and leadership abilities led to his appointment as the President and CEO of the company.
Under Musser’s leadership, Expeditors continued to expand its global footprint and strengthen its position in the logistics industry. The company focuses on providing innovative supply chain solutions and logistics services to its clients worldwide. Musser’s employment history and expertise in the field of logistics played a crucial role in guiding the strategic direction of Expeditors International of Washington.
The Glassdoor Rating is 3.6.
The Glassdoor CEO Approval Rating of Jeffrey Musser is 78%.
➡️ Goal: It’s important to highlight important company-specific news as well as industry-specific news over the last month and year. We don’t need daily news on a company to make buy or sell decisions because we’re investors, not traders. Overall, we want sufficient news to understand where a company and industry are heading over the next year or few years.
This article from zacks.com states that Expeditors announced a dividend hike of 3%. This means Expeditors continues to increase its profitability and has decided to reward shareholders for continuing to hold the stock.
This article from zacks.com states that Expeditors beat expectations on the latest earnings report. The expected EPS was $1.36 and the reported EPS was $1.45.
➡️ Goal: All of our homework on this company leads up to the 4M checklist. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the business, the competition, and the management. If all 4Ms pass, we should have high confidence in buying this stock.
✅ MOS: The financials are fantastic. The score of 95/100 shows us this company is operating very well and the MOS of 90% shows there is significant upside potential.
✅ Meaning: This is a strong business model with a wide variety of revenue streams including logistics, IT, and insurance.
✅ Moat: There are a few strong competitors in this industry but Expeditors has the highest score.
✅ Management: With the Glassdoor ratings, we like to see a Company Score of 4.0 or higher and a CEO Approval of 80% or higher. In both cases, Jeffrey Musser is very close. In this circumstance, we’ll also give him a pass.
8. Is Expeditors stock a good buy?
All 4Ms look great! Expeditors International of Washington is a strong potential buy. If you’re looking for a logistics stock to create a little diversity in your portfolio, this stock is worth a look.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.
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