Expeditors International (EXPD) shares were slammed down 12% following a downgrade by two major investment banks from buy to neutral last week. I've read the two banks' reports, which came a day after EXPD reported third-quarter earnings, and I believe that their complaints are fairly minor. However, the stock does trade at a very high multiple to its growth rate, as it always has, and therefore is always vulnerable to taking such a hit.

So what really happened in the third quarter? Well, EXPD reported earnings of 34 cents per share, which was in line with analysts' consensus estimates. Revenue was up 14.6% year over year to $1.4 billion, which handily beat consensus estimates of $1.39 billion. Ocean freight costs were a little higher than many people were expecting during the quarter, but really the company showed terrific revenue and operating margin growth in a brutally competitive business.

I have little doubt that EXPD will continue to gain market share and beat peers for new business, again as it always has. The company has a unique culture of military-like, single-minded forcefulness and continues to run in the image of its founder and leader, Peter Rose, in Seattle. So in regards to the recent drop in share price, the thing that may have spooked investors was the company's statement about the Department of Justice's investigation of price-fixing in the international air freight forwarding industry. Management said in a written statement that they had retained an outside law firm to conduct a "very rigorous" self-review and was fully cooperating with the DOJ to determine if any anti-competitive behavior occurred. But knowing the super-competitive atmosphere that prevails at EXPD, it would be quite a shock if any cooperation with rivals were uncovered.