$Air Transport Services (ATSG.US)$ Air transport servicesIt ...

Air transport servicesIt is a freight company. After going public in 2005, it fell all the way to $0.12 in 2008, then fluctuated and rose to a high of $34.54 in 2022. Currently, it has fluctuated to $30.49. Over the past 5 years, gross margin has risen from 14.7% to 21.6%, and the return on net assets has fluctuated from 5.1% to 21.3%, which looks good.

With the exception of 2018, revenue increased for 4 years, and operating profit continued to rise for 5 years. Net profit declined in 2017, 2019, and 2020. In particular, it shrank by 48% in 2020. In the first quarter of 2021, revenue increased 29%, and there was also a slight increase from month to month. Operating profit and net profit increased 23% and 18% respectively, which was a very good increase. The 5-year average growth rate of operating profit reached 38%.

The income statement shows that the increase in operating profit in 2018 was due to losses of 80 million in the sale of securities in 2017, which lowered the base. In 2019 and 2020, other categories lost 40 million and 140 million, respectively, and the majority also lost securities and equity. In 2021, other categories had revenue of 45.229 million, so it is more reliable to look at operating profit. Interest expenses were $65 million, accounting for 20% of the operating profit of $320 million.

The balance ratio increased from 74.5% to 83.7% over the past 5 years, then declined to 59% now. Accounts receivable and inventory levels are normal, with goodwill and intangible assets of $500 million, accounting for 37% of net assets of $1.35 billion.

Net operating volume has accumulated 2 billion in 5 years, net investment has accumulated 2.9 billion in 5 years, and the surplus is negative 900 million. Net operating volume has begun to exceed net investment in the past two years. The flow ratio is 1.04 and the speed ratio is 0.79, which is quite safe.

Currently, the price-earnings ratio is 10.63. Excluding other categories, the price-earnings ratio is 12. Judging from the current growth rate, the valuation is not high, but considering the recent general environment of oil prices and interest rate hikes, as well as the cyclicality of the aviation industry, you can choose carefully, and heavy positions are not recommended (⭐️)