Old Dominion Trucking Company

7/14/2011 Waste Management Adds 1000th Truck to Natural Gas Fleet

At a ceremony at its Carson, Calif., property, the company commemorated the delivery of its 1,000th natural gas vehicle with Long Beach Mayor Bob Foster starting up the new recycling truck that will serve his city's residents.

"This is a special milestone in our journey to develop the cleanest fleet of heavy duty trucks in our industry," said Duane Woods, senior vice president at Waste Management.

The trucks Waste Management runs out of its Carson service yard, as well as a third of its California clean fleet, are powered by liquefied natural gas derived from the decomposition of organic waste in its Altamont Landfill in Livermore, Calif. Since November 2009, the landfill has been generating as much as 13,000 gallons of LNG per day.

In just one year, Waste Management's 1,000 natural gas trucks will displace 8 million gallons of petroleum and eliminate 45,100 metric tons of greenhouse gas emissions.

Waste Management also has CNG and LNG fueling stations at 17 of its facilities throughout North America with more under development. Woods added that the company hopes to develop a new landfill-gas-to-LNG facility at its Simi Valley, Calif., landfill.

Aggressive Growth Stock: Old Dominion Freight

Is coming off of its sixth consecutive earnings surprises. Estimates are moving higher and valuations are looking good.

Taking a deeper look at this Zacks #1 Rank (Strong Buy) is well worth your time.

Company Description

Old Dominion is a national freight company that offers less-than-truckload services in 5 days or less. They load up a single truck with multiple orders and route them through delivery centers.

Well Ahead of Expectations

On Apr 27 Old Dominion reported a 33% jump in quarterly revenue to $423 million, $21 million better than analysts expected. Beating on the top line can be just as, if not more, important than beating on the bottom line.

Fortunately the company did both. Earnings per share came in at $0.38, which was 9 cents higher than the Zacks Consensus Estimate. Net income almost tripled, from $7.7 million a year ago to $21.6 million.

Estimates Move Higher

After the sixth consecutive earnings surprise, analysts kept raising their estimates. The Zacks Consensus Estimate for 2011 is up 21 cents, to $1.98 after 18 upward revisions.

Next year’s projections are averaging $2.42, up 25 cents. Last year Old Dominion mad $1.35 per share, so the expected growth rates are now 46% and 23%, respectively.

And Shares are Cheap

You might not be climbing over people to get to its 19 times forward P/E ratio, but the expected growth puts the PEG at 0.8, a solid bargain. The P/S is 1.3 times and the shares are just under 3 times book value.

The Chart

Shares could be on the verge of a momentum-based buy signal as the MACD is about to cross over. With a solid earnings history, rising estimates and solid valuations, it is no wonder ODFL is a Zacks #1 Rank (Strong Buy).

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com.