Dec. 22, 2015, 9:19 AM
- Crumbling oil prices haven't helped the Dow Jones Transportation Average (NYSEARCA:IYT) - down 19% year-to-date vs. the DJIA's (NYSEARCA:DIA) 3% loss.
- Oppenheimer technician Ari Wald isn't seeing a bottom though. He expects the Transports to break below 7,400 support (last night's close was 7,415), and with it the DJIA to slip to the 16K area (last night's close 17,252).
- Transport buys: JBLU, MATX, ALK, LUV, DAL, UAL
- Transport sells: CHRW, LSTR, JBHT, KSU, NSC, CAR, KEX, CSX
Dec. 2, 2015, 5:15 PM
- CSX and Kansas City Southern (NYSE:KSU) posted respective showings of -3.7% and -7.1% in today's trade after offering downbeat outlooks at a Credit Suisse industrials conference.
- CSX CFO Frank Lonegro said the company now expects FY 2015 EPS growth of ~3% after issuing guidance in October for annual EPS of $2.00-$2.04, or growth of at least 4%.
- "While we continue to expect to move around 30M tons of export coal for the full year, domestic coal movements have declined more significantly in the fourth quarter than expected," Lonegro said.
- KSU CFO Michael Upchurch said he expects Q4 revenue to decline at a high single-digit percentage rate from a year ago, vs. revenue consensus of $622M implying a 3.3% decline.
- KSU also said that after a strong start to Q4 in October, intermodal volumes decelerated in November, to signal an end to the peak season.
- Also today: UNP -2.7%, NSC -2.8%, CP -2.7%, CNI -2.1%, IYT -2.1%.
Dec. 2, 2015, 12:17 PM
- Transportation stocks are lower on the day on some broad macroeconomic concerns. Some BAML downgrades in the sector are also weighing on sentiment.
- Trading is notably weak in CXS Corp (CSX -2.3%), American Railcar Industries (ARII -2.6%), Kansas City Southern (KSU -1.9%), YRC Worldwide (YRCW -5.7%), Heartland Express (HTLD -3.7%), Swift Transportation (SWFT -3%), FedEx (FDX -0.9%), UPS (UPS -0.5%), Air Transport Services (ATSG -1.7%), and Matson (MATX -2.5%).
- A notable exception to the sector slide is airline stocks which are showing strength after Delta Air Lines (DAL +2.7%) reported some eye-opening capacity constraint. The major carrier increased passenger revenue per available seat mile sand load factor during November. A 3% decline in crude oil prices is also factoring in to the rally in airline stocks.
- United Continental (UAL +3.2%), Hawaiian Holdings (HA +2.9%), Southwest Airlines (LUV +2.3%), and Republic Airways Holdings (RJET +4.4%) are all solidly higher.
- The Dow Jones Transportation Average is down 0.8% off the conflicting forces of gravity.
- Related ETFs: IYT, XTN, JETS.
Oct. 27, 2015, 3:29 PM
- Railroad and trucking stocks are down today on a mix of news seen as negative for the transportation sector. UPS reported lower package volume in Q3 and durable-goods orders fell in September.
- Decliners include Norfolk Southern (NSC -3.6%), Union Pacific (UNP -5.1%), CSX Corporation (CSX -3.8%), Kansas City Southern (KSU -4.4%), Canadian Pacific(CP -5.4%), Canadian National Railway (CNI -3.9%), Genesee & Wyoming (GWR -5.3%), XPO Logistics (XPO -11.8%), Echo Global Logistics (ECHO -12.6%), C.H. Robinson Worldwide (CHRW -2.8%), Radiant Logistics (RLGT -7.9%), FedEx (FDX -1.4%), Air T (AIRT -5.9%), and Air Transport Services (ATSG -3.2%).
- The iShares Dow Jones Transportation ETF (NYSEARCA:IYT) is down 2.7%.
- Related: Tough day for four wheelers (Oct. 27)
Oct. 13, 2015, 1:12 PM
- Transportation stocks are weak today on macroeconomic concerns and with a guidance cut from Ryder capturing some attention. Investment firms have also chipped away at the airline and railroad sectors with downgrades and price target revisions.
- The move lower includes a wide variety of trucking, freight, and logistics stocks. FedEx (FDX -1.4%), Norfolk Southern (NSC -1.5%), CSX Corporation (CSX -1.7%), Knight Transportation (KNX -4.8%), J.B. Hunt Transport Services (JBHT -2.4%), Landstar System (LSTR -1.5%), Heartland Express (HTLD -2.7%), Air Transport Services Group (ATSG -1.6%), Allegiant Travel (ALGT -3.4%), Virgin America (VA -4.3%), and Hub Group (HUBG -2.9%) are all lower than broad market averages.
- The Dow Jones Transportation Average is off 1.76% vs. the S&P 500 -0.26%.
- Related ETFs: IYT, XTN.
Sep. 3, 2015, 3:12 PM
- How bad a year has it been for multi-industry stocks? Year-to-date underperformance relative to the S&P 500 is among the poorest in a decade and has gotten worse in recent weeks, say Goldman analyst Joe Ritchie and team. The negative news is no secret: Broad industrial de-stock, softening oil capex, the strong dollar, and the troubles in China. Because of this, the team remains Neutral on the beaten-up sector, but does have a few names investors should steer clear of:
- With de-stock keeping U.S. industrial growth in a "headlock," the implications are particularly negative for Sell-rated Emerson Electric (NYSE:EMR), WW Grainger (NYSE:GWW), and Neutral-rated Parker-Hannifin (NYSE:PH) and Rockwell Automation (NYSE:ROK).
- With oil capex going from bad to worse, and oil lower for longer, the Street is underestimating the impact of price declines for Dover (NYSE:DOV), Emerson, and Flowserve (NYSE:FLS). On the flip side, lower input costs should be a boon to Buy-rated Illinois Tool Works (NYSE:ITW) and Neutral-rated 3M (NYSE:MMM).
- The weaker China backdrop is most negative for Emerson, and Neutral-rated Eaton (NYSE:ETN) and Colfax (NYSE:CFX). Though Buy-rated Honeywell (NYSE:HON) and ITT Corp (NYSE:ITT) have exposure, growth is more insulated due to their market share gains.
- Source: Barron's Ben Levinsohn
- ETFs: XHB, ITB, XLI, PHO, IYT, ITA, VIS, PPA, XTN, XAR, FIDU, PKB, IYJ, FXR, UXI, PRN, RGI, SIJ, PSCI, AIRR
Aug. 28, 2015, 10:50 AM
- UBS lines up three transportation stocks it sees as trading at attractive valuations.
- FedEx (FDX -0.2%): The shipping giant trades at a discount to UPS and is leveraged to e-commerce growth, notes the investment firm. The UBS price target of $195 implies 27% upside potential.
- Knight Transportation (KNX +2.9%): Lower fuel costs and strong GDP numbers bode well for the trucking stock. UBS has a price target of $33.
- Kansas City Southern (KSU +0.9%): UBS thinks additional capacity could make a difference for the railroad. A 19% breakout for shares to $111 is seen.
- Related ETFs: IYT, XTN.
May 26, 2015, 9:57 PM
- Airline stocks stretched their losing streak to six sessions today, the longest such stretch since last October and the worst cumulative showing (-8.8%) since shedding 10.9%, also in October.
- Analysts cite pressure from concerns over capacity growth and the resulting lack of pricing power, as well as a May spike in west coast jet fuel prices due to several unscheduled refinery outages; "jet fuel assumptions at airlines may have to be raised due to the high cost of refining jet fuel on the west coast," Cowen's Helane Becker says.
- Even as he remains somewhat bullish on the stocks, UBS analyst Darryl Genovesi today cut his earnings estimates this year and next for American (NASDAQ:AAL), Delta (NYSE:DAL) and Alaska Air (NYSE:ALK), and lowered his estimate for Southwest (NYSE:LUV) earnings this year and United (NYSE:UAL) in 2016.
- Among some of the more active airline stocks, DAL has fallen 11%, JetBlue (NASDAQ:JBLU) has shed 8.7%, AAL has plunged 15%, and LUV has sunk 14% over the past six sessions.
- ETFs: IYT, JETS
May 15, 2015, 11:02 AM
- Dow Theory types have something to worry about thanks to a widening spread between the record-setting DJIA (NYSEARCA:DIA) and the underperforming Dow Jones Transportation Average (XTN, IYT).
- The divergence began last November when the Transports hit a record-high. Since, the Transports are down 6.7% while the DJIA is ahead more than 2%.
- The editor of TheDowTheory.com, Jack Schannep found 14 instances of wide divergences over the last 25 years. In nine of them, the broader market subsequently declined by less than 10%, but in the other five, the fall averaged 25.7%, i.e. a full-scale bear market.
- ETFs: DIA, DOG, DXD, UDOW, SDOW, DDM, UDPIX
Jan. 17, 2015, 8:28 AM
- Up for discussion is not necessarily where oil prices are going (who knows?), but the effect of the recent plunge in price on the economy.
- Summing up the bear case is Felix Zulauf who says It'll hurt the economy dramatically thanks to lower capital spending, and he notes a lot of oilfield jobs are high-paying ones. Consumers will benefit from lower energy costs, but will save the money instead of spending it. If lower oil prices benefit consumer discretionary spending, says Marc Faber, why did 89% of S&P consumer discretionary companies (NYSEARCA:XLY) offering Q4 guidance issue negative guidance?
- Those are lagging figures, says Mario Gabelli, reminding the big collapse in prices only came around Thanksgiving and the effects are just beginning to show up in the form of lower credit card statements. "I talk to the guys who are pumping gas, and they say the consumer is buying more beer."
- Also on the bullish side is Abby Cohen, who reminds the transportation (NYSEARCA:IYT) and utility companies (NYSEARCA:XLU) are major consumers of energy, and her team at Goldman sees the oil decline as boosting S&P 500 (NYSEARCA:SPY) profits this year.
- Barron's Roundtable Part 1
Jun. 30, 2014, 6:53 PM
- Barclays upgrades its view of the transportation sector to positive, as an improving fundamental backdrop is set to drive meaningful earnings expansion across a broad array of transport companies.
- Among signs of improving fundamentals: rail volume up 7%, U.S. trucking demand up 3%-4%, small package markets up 5%, and global trade up 5%-6% - all implying strong industrial demand.
- Sector valuations are the highest since the 2009 recession and has outperformed YTD, but with Q2 results ripe to usher in more bullish sentiment in the space, Barclays expects valuations could have further to run as markets discount a more robust outlook.
- The firm's top recommendations in sector are UNP, UPS, SWFT, CP and JBHT, while also upgrading CNI and NSC to Overweight, adding more exposure to the favorable North American rail vertical.
- ETFs: IYT, XTN.
Jan. 24, 2014, 12:08 PM
- Previously immune to the selloff in the broader averages, things catch up to the Dow Transports Index (IYT -3%), with today's decline following yesterday's new all-time record.
- Richard Russell alert? Followers of Dow Theory like to see industrials and transports moving together to confirm a trend. Prior to today's action the DJIA (DIA -1.2%) was down 2.3% YTD while the transports were up 2.3% - giving hope the broad market might be set to reverse course. Today's slump though, brings the transports into the red for the year.
- Another transport ETF is the XTN.
- DJIA ETFs: DIA, DOG, DXD, UDOW, SDOW, DDM
Nov. 12, 2013, 12:10 PM
- AMR (AAMRQ +24%) soars upon settlement of the DOJ suit over its merger with U.S. Airways (LCC -0.6%).
- The two will divest 52 slot paris at Reagan National and 17 at LaGuardia, as well as two gates each at Logan International, O'Hare, Love Field, LAX, and Miami. Even with the divestitures, the new American is expected to generate net synergies of more than $1B beginning in 2015.
- IYT +0.6%.
Nov. 12, 2013, 10:25 AM
- Airline stocks are higher on chatter that a settlement between US Airways and AMR (AAMRQ) is close to being finalized.
- The industry for the most part would like to see the American-US Airways merger go through as it would make it easier to keep capacity discipline in line than if American emerged from bankruptcy as a feisty stand-alone.
- Advancers: US Airways (LCC) +2.7%, United Continental (UAL) +2.8%, Delta Air Lines (DAL) +1.7%, JetBlue (JBLU) +0.9%, Alaska Air Group (ALK) +0.9%.
- Related ETFs: IYT
Jul. 9, 2013, 11:10 AM
Jul. 1, 2013, 11:32 AM
Get out of transports (IYT), says Citigroup, noting the sector will be hard-pressed to continue its 400 basis point outperformance to the S&P 500 over the last quarter. In addition to expected cyclical weakening, Citi says seasonals don't favor transports during the summer. Also lowered to underweight is telecoms (XTL, IYZ) despite attractive valuations, as Citi believes technology will continue to erode pricing power.| Jul. 1, 2013, 11:32 AM
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