J.B. Hunt Keeps on Truckin'

Stocks make counterintuitive moves all the time. In many cases, instead of listening to the market, investors listen to the naysayers and end up missing out on the move. No one could understand it, for example, when an accumulation phase started in the homebuilders in October. It's continued ever since, and the group continues to provide leadership. The homebuilders are signaling better times ahead, but the American public is not so sure. Earlier this week, April existing-home sales rose 3.4% from March, to 4.62 million units. After that, new-home sales rose 3.3%, to 343,000 units. The cherry on top for the homebuilders this week was when Toll Brothers (TOL) reported solid earnings on Wednesday. The company earned $0.10 a share, besting the consensus estimate by $0.06, and reversing a year-ago loss of $0.12. Sales were a bit light at $373.7 million, but still up 17% from a year ago. New orders jumped 47%, to 1,290 units, while backlog climbed 37%, to 2,403 units. Meanwhile, the performance of J.B. Hunt Transport Services (JBHT) has caught my eye. It's also a counterintuitive move to some extent as Wall Street frets about a sluggish economy and potentially slower growth ahead. But don't tell J.B. Hunt about slower growth, not after nine straight quarters of double-digit earnings and sales growth. Last month, the company reported first-quarter profit of $0.57 a share, up 43% from a year ago. Sales rose 17%, to $1.17 billion. Intermodal revenue rose 20%, to $694.3 million. Intermodal involves the transportation of freight in an intermodal container or vehicle, using multiple transportation modes (rail, ship and truck). Growth prospects look pretty good at J.B. Hunt. This year, the company is expected to earn $2.64 a share, up 24% from 2011. Next year, annual profit is seen rising 16%, to $3.05 a share. Headed into Friday, the industry group leader was working on a five-session winning streak, sitting just off a 52-week high. My job is not to question why the stock has been under accumulation lately, but to recognize that it's happening. Stocks under accumulation bear watching here, especially if new money starts to move in from the sidelines and major averages start new uptrends. J.B. Hunt Transport Services (JBHT) Source: StockCharts.com View Chart » View in New Window » Finally, I wanted to comment on recent market action. The market's tough at the moment because it's difficult being long with conviction, and it's also tough being short with conviction. Today marks the fifth day of a rally attempt for the major averages that started on Monday. A big percentage gain for the indices from here (preferably 2% or more) on higher volume is a buy signal. A sign of strength like this won't give me carte blanche to move all in, but it would give me the signal to start selectively nibbling in strong performers such as J.B. Hunt that have held up well during recent market softness. For now, concerns about Greece and whether or not it will exit the eurozone have brought uncertainty back into the market, resulting in choppy action this week. After Monday's strong showing by the major averages, strength in the morning has been followed up by weakness in the afternoon and vice versa. While it's true that Greece's economy only makes up about 3% of the total eurozone economy, contagion risks are out there. Several eurozone countries with financial exposure to Greece would be adversely affected if Greece returns to the drachma. The question is how much? World markets aren't sure, and that's what's keeping buyers away for now. Any other counterintuitive moves you're seeing in individual stocks? Leave a comment!

J.B. Hunt Keeps on Truckin'

The company has delivered nine straight quarters of double-digit earnings and sales growth.

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