The best investments are generally boring.
Just take a look at Heartland Express (HTLD Get Heartland Express, Inc. Report if you have any doubts. Paul Price writes: "The old saying goes, 'Never short a dull market.' The same idea applies to individual stocks."
"Heartland Express, a short-to-medium haul truckload carrier certainly has shown dull price action over the past few years. Earnings per share, though, have been creeping higher and should establish new all-time records during both 2022 and 2023."
As for the balance sheet, "The company is debt-free and holds over $2.07 per share in net cash. Management retired over 5% of the outstanding shares since 2012 strictly from internally generated cash flow."
And yet, "All those factors led to this...HTLD now sells for its lowest valuation since January of 2013. Smart buyers who picked up shares early in 2013 were well rewarded. HTLD surged from $13 to $28 (up 115.4%) over the following 22 months."
Infrastructure and back-end companies like Heartland Express provide a service that just about everybody needs. They might not be flashy, but they’re indispensable. For investors this means that the company will often make for a solid, reliable investment over the long run.
"Making money in HTLD simply requires buying when it is depressed in price and having the patience to hold for the next inevitable upturn."
Investors tend to look for the flashy companies, the ones that make headlines or big products. This can make you a lot of money, but it tends to produce a much more volatile portfolio. On the other hand, the boring companies? Those can build real long term value.
"Heartland Express is a fine company that is being overlooked in favor of what seems to be "more exciting" opportunities. Those with patience should consider buying shares and/or shorting puts."
