Ryder System is engaged in providing in transportation and supply chain management solutions. Co. operates in two business segments: Fleet Management Solutions, which provides full service leasing, commercial rental, contract maintenance, and contract-related maintenance of trucks, tractors and trailers to customers principally in the U.S., Canada and the U.K.; and Supply Chain Solutions (SCS), which provides supply chain consulting solutions including distribution, and transportation services in North America and Asia. The SCS product offerings are organized into four categories: dedicated services, distribution management, transportation management and professional services.
In our opinion Ryder Systems does not have an economic moat. The company relies on superior execution to drive success.
The company's largest segment, Fleet Management Solutions (FMS), has exhibited strong top-line momentum, in spite of rate hikes. Core fleet growth has been expanding faster than anticipated, while the revenue mix has been enhanced by the elimination of lower-margined trailers. Ryder's long-term prospects are favorable, as well. In addition to the move toward outsourcing, recently inked joint ventures offer promise. The company's deal with Mansfield to offer a compressed natural gas (CNG) vehicle and fuel solution to bulk fuel haulers adds to profit potential.
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Fairly spread services portfolio helps to boost revenues
Strong financial performance supports future growth initiatives
Unfunded employee post-retirement benefits could negatively impact liquidity position
Overdependence on the US market could increase business risks
Intense competition could strain margins
Compliance with government regulations could adversely impact financial position Volatility in the fuel prices could adversely impact earnings
Promising outlook of North American transportation services industry could boost topline growth
Growing opportunities for outsourced logistics could provide significant growth opportunities
New pipeline of contracts and service agreements would ensure stable revenue growth
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The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.