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Richard Brandtnasdaq:ddmx, nasdaq:vexp, nyse:ups

Dynamex Inc.: Who you gonna call?

Richard Brandt  |  Apr 08, 2008 6:20am EDT  |  User Rating N/A

Sometimes, tomorrow just doesn’t come soon enough. When a business has a package that has to be delivered in the metropolitan region before the end of the day, who is it you’re going to call? One of the best choices is Dallas, Texas-based Dynamex Inc. (Nasdaq:DDMX), a leading same-day delivery service that is proving to hold up even in a tough economy.

Dynamex has a series of business centers in major business regions throughout the United States and Canada, employing a fleet of delivery trucks and a computer-tracking system to keep things moving quickly. That makes it a good choice for hurried businesses that need reliable delivery from a company that has been around for more than a dozen years.

Its competition is mainly mom-and-pop shops or in-house delivery systems. Outsourcing to a reliable service is a cheaper alternative in a tough economy. “The economic cycle is still favorable for Dynamex,” said Michael Friedman with Noble Financial Group.

On March 6, Dynamex delivered strong earnings for the second quarter of its 2008 fiscal year. Revenue increased 10.9% to $112 million, beating analysts’ estimates of 6% to 10% growth. Net income of $3.4 million was down from the year-ago quarter of $3.7 million because of hardware and software upgrades and lower interest income. But earnings per share of $0.33 beat the consensus of $0.31 and reflected a 27% increase over last year’s adjusted EPS.

Its stock price, however, has reflected investor concerns about the economy, perhaps too much so. Its 52-week (and all-time) high was $30.47 in late October. It then dropped to a 52-week low of $21.55 in early March as investors retreated on economic news. In his March 6 report, Alexander Brand at Stephens Co. wrote: “The stock has pulled back from $30 to $22 for no fundamental reason, and we think fundamentals will continue to be solid going forward.”

Since then it has partially recovered, closing at $26.21 on Monday. Friedman recently downgraded his target price to $31 from $33, hedging in case the economy drags . . .



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