Transportation Winners and Losers

Audit Integrity identifies potential losers and winners in a transportation industry suffering the impact of record high oil prices in a new report.

Individual sectors have varying levels of cost absorption and pass through structure, resulting in differing levels of cost offset and impact to profitability, the report says.

Audit Integrity looks at companies through the lens of how they rank in corporate governance, using its Accounting and Governance Risk [AGR] and AGR Equity Factor rankings.

One airline in the bottom-ranked Very Aggressive AGR category is Delta Air Lines (DAL).  Its stock is down 73% from a year ago.

Rising oil prices also affect the shipping lines, and have made transportation costs significantly more expensive, especially for products with a high freight cost-to-value ratio.

Among shipping companies, Genco Shipping & Trading (GNK) has a low Very Aggressive AGR ranking, while Brazilian shipper Ultrapetrol (Bahamas) Limited (ULTR) is in the top-ranked Conservative AGR category.

Railroads are also dependent on diesel but are relatively more efficient than trucking companies, so stand to benefit from increasing demand. Burlington Norther Santa Fe (BNI) is in Audit Integrity’s top-ranked category and also benefits from being the second-largest railroad operator in the US with the advantage of a substantial amount of railroad tracks.

The report, available here, details the 11 transportation companies with Audit Integrity’s highest AGR rankings and the 11 with the lowest.

Comments

[Jake2:]

Writer neglects to mention flooding in the midwest and the affects on rail shipping: lower or late crop yields, tracks undedrwater, bridges washed out, etc. All will have an impact on earnings. Tell me I'm wrong . . .

2008 Jun 30 01:01 AM

[blink0404:]

As the market continues to go down, shipping, which used to be a safe haven, now looks like it may be subject to a downward trend. Here's a pretty good podcast that discusses what to during this down market and what's going on with coal, steel, bulk shipping, and agriculture.

the main idea is that individual investors dont have to act like institutional investors and this market and may be better holding cash than trying to beat the market.
www.greenfaucet.com/sh...

2008 Jul 03 12:14 PM

[buyforeclos...:]

Hey green faucet...that information would have been good 4 weeks ago! I am screwed and swimming ( drowning ) in the RED frickin sea!

2008 Jul 03 04:36 PM

[HALROW:]

Ultr ultrpetrol bahamas ltd is a very undervalued diversifed sea and river shipper with low float shares and impending growth into 2010
and beyond..they announced cash liquid assets going out 12 years and is a must look into info stock for long term gainsand potential share splits...thats the forward split type....well at least this is my thinking according ti its current low trading float share number of
only 8 million shares.........looks real inviting AT ITS CURRENT
$ 5,31 A SHARE.......LOOK AT ITS INFO AND TELL ME WHAT
YOUI SEE...................... ............ THE LATTER BEING MY OWN OPINION !

Jun 06 11:07 PM