LSTR: Updating Landstar vs. CH Robinson

On December 4 2007 I wrote a piece called Roll with Landstar, Short CHRW, saying:

“Based solely on sales or operating margins, Landstar (LSTR - Annual Report) is about 35% the size of CH Robinson (CHRW - Annual Report). If it had the same relative valuation, it would trade at $52 per share.

CH Robinson’s forward price-to-earnings multiple is 24.6, compared with 19.3 for Landstar. At 24.6 times estimated 2008 earnings, Landstar would be trading north of $54. Assigning CHRW’s 1.67 PEG ratio (P/E ratio related to its growth rate) to Landstar would give it a $49 value.

CH Robinson has a lofty 16.1 times EV/EBITDA ratio. If Landstar got that multiple, its stock would be $60.”

The day I wrote the article, Landstar closed at $43.02 and CH Robinson was $53.03. Today, they are in a dead heat price-wise, with LSTR at $55.59 and CH Robinson at $55.03.

While I’m still bullish on (a