I would say that ODFL has got quite a lot going for it as a business ....
It's price, in terms of its "Equity Bond" parameter, is slightly below the value of $359 that would get it into the "expensive range". If one looks at its chart it hit about $360 at "A" before it then fell back .....
And with regard to its current P/E of around 28, I wouldn't get too hung up about it.
As one can see over the last 5 years ODFL traded between about PE 20 and PE 30 as at "C" and showed a Price Gain of around (300 - 100)/100 = ~200%, equivalent to a compounded rate of about 30% PA over the 4 year period,
It got to be overly expensive for the Buyers when ODFL hit a PE of around 40.
Quality companies generally trade at higher PE's than the more "average" companies.
Here we have UNP, another Quality company in the "Road & Rail" sector, which has traded with PE's in the 20 to 30 range .....
If ODFL should, for some reason, fall back to its recent Support level of $250 - 260 at "B", that would, IMO, be a good time to buy its shares on the basis of its future critical Financial ratios remaining much the same as now ..... |
