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Category: Stock Market and Rush Enterprises
Date: 22 October 2019 Stock Price: $41.42 We take a look at the latest earnings report for the 2nd quarter of their 2019 financial year of Rush Enterprises, a solutions provider to the commercial vehicle industry.
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About Rush Enterprises
Rush Enterprises, Inc. is the premier solutions provider to the commercial vehicle industry. The Company owns and operates Rush Truck Centers, the largest network of commercial vehicle dealerships in the United States, with more than 100 dealership locations in 22 states. These vehicle centers, strategically located in high traffic areas on or near major highways throughout the United States, represent truck and bus manufacturers, including Peterbilt, International, Hino, Isuzu, Ford, Mitsubishi, IC Bus and Blue Bird. They offer an integrated approach to meeting customer needs — from sales of new and used vehicles to aftermarket parts, service and collision center operations plus financing, insurance, leasing and rental. Rush Enterprises' operations also provide vehicle upfitting, CNG fuel systems and vehicle telematics products.
Financial overview of Rush Enterprises 2nd quarter 2019 earnings report
The numbers below refers to the latest quarter unless specified otherwise
- Revenue: $1.544 billion (up from $1.348 billion for the same quarter of the previous year)
- Cost of goods sold: $1.275 billion (up from $1.105 billion for the same quarter of the previous year)
- Net Income: $41.621 million (up from $29.389 million for the same quarter of the previous year)
- Diluted earnings per share: $1.13 (up from $0.72 for the same quarter of the previous year)
- Weighted average number of shares - diluted: 37.695 million (down from 40.690 million for the same quarter of the previous year)
- Cash and cash equivalents: $111.346 million
- Cash and cash equivalents per share: $2.95
- Cash and cash equivalents makes up 7.12% of Rush Enterprises' market capital
- Cash and cash equivalents makes up 3.15% of Rush Enterprises' total assets
- Inventories: $1.512 billion
- Inventories makes up 42.8% of Rush Enterprises' total assets
- Stockholders' equity in Rush Enterprises : $1.113 billion
- Stockholders equity per share: $29.52
- So Rush Enterprises is trading at 1.4 times its stockholders equity per share, which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
Rush Enterprises' management commentary on the earnings and fiscal guidance
SAN ANTONIO, July 24, 2019 (GLOBE NEWSWIRE) -- Rush Enterprises, Inc. (NASDAQ: RUSHA & RUSHB), which operates the largest network of commercial vehicle dealerships in North America, today announced that for the quarter ended June 30, 2019, the Company achieved revenues of $1.545 billion and net income of $41.6 million, or $1.10 per diluted share, compared with revenues of $1.349 billion and net income of $29.4 million, or $0.72 per diluted share, in the quarter ended June 30, 2018
“We are proud of our solid financial results and everyone at the Company who worked hard to achieve such a successful quarter,” said W.M. “Rusty” Rush, Chairman, Chief Executive Officer and President of Rush Enterprises, Inc. “A healthy economy, widespread activity in the commercial vehicle market and the continued execution of our aftermarket strategic initiatives positively impacted our results in the second quarter. Our truck sales outpaced the commercial vehicle market in both Class 8 and Class 4-7, and we achieved record performance in medium-duty truck sales this quarter,” Rush said. “I am also pleased to announce that our Board of Directors approved a $0.01 increase in our quarterly cash dividend, our first increase since we announced our intent to begin paying a quarterly cash dividend in July 2018 as part of our capital allocation strategy. This dividend increase represents an 8.3% increase over the first quarter of 2019 dividend. The Company expects to increase the dividend on an annual basis over time, although future declarations of dividends are subject to approval by the Company’s Board of Directors and may be adjusted as business needs or market conditions change,” explained Rush.
“As always, it is important that I thank our employees for their unmatched service to our customers and unwavering commitment to the successful execution of our strategic initiatives,” said Rush.
During the second quarter of 2019, the Company repurchased $12.1 million of its common stock, bringing the total amount of repurchases to $104.0 million since the adoption of a plan to repurchase up to $150.0 million of stock in November of 2018. In addition, the Company paid a cash dividend of $4.4 million during the second quarter and today declared a dividend of $0.13 per share, its fifth consecutive quarterly dividend and an 8.3% increase over the $0.12 per share dividend declared in each of the previous four quarters. “We continue to have confidence in our ability to execute on our capital allocation strategy by returning capital to our shareholders while growing our business and investing in our company’s future,” said Rush.
“We are proud of our solid financial results and everyone at the Company who worked hard to achieve such a successful quarter,” said W.M. “Rusty” Rush, Chairman, Chief Executive Officer and President of Rush Enterprises, Inc. “A healthy economy, widespread activity in the commercial vehicle market and the continued execution of our aftermarket strategic initiatives positively impacted our results in the second quarter. Our truck sales outpaced the commercial vehicle market in both Class 8 and Class 4-7, and we achieved record performance in medium-duty truck sales this quarter,” Rush said. “I am also pleased to announce that our Board of Directors approved a $0.01 increase in our quarterly cash dividend, our first increase since we announced our intent to begin paying a quarterly cash dividend in July 2018 as part of our capital allocation strategy. This dividend increase represents an 8.3% increase over the first quarter of 2019 dividend. The Company expects to increase the dividend on an annual basis over time, although future declarations of dividends are subject to approval by the Company’s Board of Directors and may be adjusted as business needs or market conditions change,” explained Rush.
“As always, it is important that I thank our employees for their unmatched service to our customers and unwavering commitment to the successful execution of our strategic initiatives,” said Rush.
During the second quarter of 2019, the Company repurchased $12.1 million of its common stock, bringing the total amount of repurchases to $104.0 million since the adoption of a plan to repurchase up to $150.0 million of stock in November of 2018. In addition, the Company paid a cash dividend of $4.4 million during the second quarter and today declared a dividend of $0.13 per share, its fifth consecutive quarterly dividend and an 8.3% increase over the $0.12 per share dividend declared in each of the previous four quarters. “We continue to have confidence in our ability to execute on our capital allocation strategy by returning capital to our shareholders while growing our business and investing in our company’s future,” said Rush.
Rush Enterprises (NASDAQ: RUSHA) stock price history
The image below obtained from Google shows the stock price history of Rush Enterprises Class A shares (NASDAQ: RUSHA) for the last 5 years. 5 years ago the stock of Rush Enterprises was trading at around $34.70 and its currently trading at $41.42 a stock. That's a return of 19.4% provided to Rush Enterprises stockholders over the last 5 years.
The stock of Rush is trading at a lot closer to its 52 week high of $45.99 than it is to its 52 week low of $31.53, which to us is a clear indication that the short term sentiment and momentum of Rush Enterprises' stock is positive.
The stock of Rush is trading at a lot closer to its 52 week high of $45.99 than it is to its 52 week low of $31.53, which to us is a clear indication that the short term sentiment and momentum of Rush Enterprises' stock is positive.
Recent coverage of Rush Enterprises
The extract regarding Rush Enterprises was obtained from TheStreet.com
SAN ANTONIO, Oct. 02, 2019 (GLOBE NEWSWIRE) -- Rush Enterprises, Inc. (NASDAQ: RUSHA & RUSHB), which operates the largest network of commercial vehicle dealerships in North America, today announced the appointment of Elaine Mendoza as a new independent member of its Board of Directors, effective immediately. Ms. Mendoza currently serves as the President and Chief Executive Officer of Conceptual MindWorks, Inc. (CMI), a leading informatics company that specializes in providing health-related software, bioinformatics, biotechnology, scientific, and technical solutions to the public and private sectors, which she founded in 1990. Ms. Mendoza serves on the boards of several entities, including non-profits, and has been an active member of her community for more than 30 years. She currently serves as Chairman of the Board of Regents of the Texas A&M University System and as a member of the board of directors of HCSC, where she serves as the chair of the Audit and Compliance committee. Ms. Mendoza holds a B.S. in Aerospace Engineering from Texas A&M University. "We are delighted to have Elaine join our Board as a new independent director," said W.M. "Rusty" Rush, Chairman, CEO and President of Rush Enterprises, Inc. "Elaine's demonstrated entrepreneurial success and leadership acumen make her a valuable addition to the Board, and we know that she will be a tremendous asset to the Company as well," added Rush. "I am confident that Elaine's business experience will create value across numerous areas of our Board, but I am particularly excited about her future contributions with respect to her expertise in technology solutions. As I have said before, internal and customer-facing technology solutions are a major growth driver in the commercial vehicle industry and particularly as it relates to our aftermarket strategic initiatives. We are fortunate to be able to add Elaine's unique skill set and perspective to the Board, and we look forward to her contributions as part of our team.
SAN ANTONIO, Oct. 02, 2019 (GLOBE NEWSWIRE) -- Rush Enterprises, Inc. (NASDAQ: RUSHA & RUSHB), which operates the largest network of commercial vehicle dealerships in North America, today announced the appointment of Elaine Mendoza as a new independent member of its Board of Directors, effective immediately. Ms. Mendoza currently serves as the President and Chief Executive Officer of Conceptual MindWorks, Inc. (CMI), a leading informatics company that specializes in providing health-related software, bioinformatics, biotechnology, scientific, and technical solutions to the public and private sectors, which she founded in 1990. Ms. Mendoza serves on the boards of several entities, including non-profits, and has been an active member of her community for more than 30 years. She currently serves as Chairman of the Board of Regents of the Texas A&M University System and as a member of the board of directors of HCSC, where she serves as the chair of the Audit and Compliance committee. Ms. Mendoza holds a B.S. in Aerospace Engineering from Texas A&M University. "We are delighted to have Elaine join our Board as a new independent director," said W.M. "Rusty" Rush, Chairman, CEO and President of Rush Enterprises, Inc. "Elaine's demonstrated entrepreneurial success and leadership acumen make her a valuable addition to the Board, and we know that she will be a tremendous asset to the Company as well," added Rush. "I am confident that Elaine's business experience will create value across numerous areas of our Board, but I am particularly excited about her future contributions with respect to her expertise in technology solutions. As I have said before, internal and customer-facing technology solutions are a major growth driver in the commercial vehicle industry and particularly as it relates to our aftermarket strategic initiatives. We are fortunate to be able to add Elaine's unique skill set and perspective to the Board, and we look forward to her contributions as part of our team.
Rush Enterprises (NASDAQ: RUSHA) stock valuation
Based on Rush Enterprises' latest earnings report what do we value their stock at? Based Rush Enterprises' earnings reported our valuation model provides a target (full value) price at $57.20 per Rush Enterprises' stock. We therefore believe the stock of Rush Enterprises' is undervalued.
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $57.20. We therefore believe a good entry point into Rush Enterprises' stock is at $51.50 or below. We expect the stock price of Rush Enterprises to tick upwards in coming weeks and months unless their 3rd quarter earnings release on 24 October 2019 surprises significantly to the dowside.
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $57.20. We therefore believe a good entry point into Rush Enterprises' stock is at $51.50 or below. We expect the stock price of Rush Enterprises to tick upwards in coming weeks and months unless their 3rd quarter earnings release on 24 October 2019 surprises significantly to the dowside.
Next earnings release of Rush Enterprises
Rush Enterprises confirmed that their 3rd quarter 2019 earnings report will be released on 24 October 2019