PreMarket Prep Stock Of The Day: What's Ahead For JB Hunt Transport?

When a stock has a huge fall from grace, it's interesting to observe how the asset reacts to its next earnings report. That's certainly the case with J.B. Hunt Transport JBHT, which announced earnings after the close on Monday.

Monster March: On Feb. 24, J.B. Hunt made a new low for the year at $185, which was nearly $20 off its year-end closing price of $204.40. It rebounded to end that session at $188.91 and embarked on an incredible rally.

Fourteen days later, it reached a new all-time high ($218.18) and an all-time closing high ($218.06).

Giving It All Back, And Then Some: After reaching that elevated level, the highs were lower in 13 of the next 15 sessions, with the two outliers being fractional gains. Following a three-day win streak, the stock slumped to its low for the move on April 12 at $166.88 and posted its lowest close for the decline a few days later at $168.23. On a closing basis, from the closing peak, that was a drop of 23% in 19 trading days.

Q1 Report: After the close on Monday, the company reported an EPS beat of $2.29 versus the $1.94 estimate, and a sales beat of $3.49 billion versus the estimate of $3.28 billion. Another positive from the report was that the company had 33% revenue growth for the quarter.

PreMarket Prep Take: When the issue was being covered on Benzinga's Premarket Prep show, JBHT was trading at the $174 area.

“The problem with this stock is that there are so many bagholders," co-host Dennis Dick said. "There's going to be willing sellers all the way up. If we go into a recession, the stock could see 140.”

The author of this article cited the major resistance at the $175 area and stressed there would be no major rallies until that level was cleared. Since the issue had distanced itself from the recent low, buyers should emerge on any weakness.

Price Action: The rally off the higher open was faded, and the issue reversed course. The ensuing decline found support just under Monday’s low ($168.57) at $168.04 and began to move higher. It has grinded higher and recached $174.69, but fell back to close at $173.88.