The total stock return for Arkansas Best Corporation is now up around 250% this year, compared to a 27% total return for the S&P 500. Although, long-term shareholders have drastically underperformed the market over the past five years with a 30% return, compared to 120% for the S&P 500. So what caused this rebound since 2012, and can Arkansas Best make up lost ground to reward long-term investors?
Back in late 2012, Wall Street had written Arkansas Best off for dead when it traded for half its book value and around around 0.1 times price to sales. Profits were down 13% year over year in 2012, and the company wasn't profitable on the income statement. When things started turning around, Wall Street realized the company wasn't going out of business and a massive rally began.
The future for Arkansas Best investors
Wall Street's prediction of Arkansas Best's demise has proved false, and the company's recent union agreement further disproves the naysayers. In the video below, Motley Fool analyst Blake Bos goes over the events leading to Arkansas Best's latest rally, and highlights two areas that investors need to watch. He'll also give his take on whether he thinks the company is still a good investment at today's prices.
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The article Why Arkansas Best Corporation Stock Skyrocketed 250% This Year, and Can It Continue? originally appeared on Fool.com.Blake Bos has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.