5 Guru-Inspired Transportation Stocks

Apr. 18, 2013 10:24 AM ETCHRW, JBHT, CP, SAIA, UNP
John P. Reese profile picture
John P. Reese

Since the global economic meltdown of 2008, most investors haven't expected much from the economy, and that doesn't seem to be changing. For many, if not most analysts and pundits, the best-case scenario for the U.S. involves "average" growth in coming years - more likely scenarios involve prolonged "tepid" growth, and downside scenarios involve complete and utter financial disaster.

Given all of the economic concerns, you might not expect the transportation sector - which tends to move in step with the broader economy - to be a place to find good investments. But the economy has done a bit better than expected since the recession ended in mid-2009, and many transportation companies have fared quite well. In fact, the Railroad and Trucking industries are number one and number two on my Validea Growth Index, which ranks industries based on the growth characteristics of the companies within them.

And, while these industries have been producing some strong growth in recent years, the economic doom and gloom talk has kept many of their valuations at very reasonable levels. Investors have begun to warm to them, with railroad stocks up about 15% so far in 2013, and trucking stocks up more than 18%, according to Morningstar.com. My Guru Strategies, each of which is based on the approach of a different investing great, are finding a number of transportation stocks that look like they still have a lot more room to run. Here are a handful that are near the top of the list. As with any quantitative screening approach, you should invest in stocks like these within the context of a well diversified portfolio to limit stock-specific risk.

C.H. Robinson Worldwide (CHRW): Robinson ($9.1 billion market cap) is a worldwide third-party logistics and freight company, meaning that it doesn't own the transportation equipment it uses. It instead

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John P. Reese profile picture
John P. Reese is considered an expert in the systematic investing strategies of legendary investors, including Peter Lynch, Ben Graham, Warren Buffett and others. He has been active in the development of fundamentally-based quantitative models since the mid-90s. His research on Seeking Alpha will include stock ideas, strategy and value investing pieces, behavioral finance concepts, systematic and modeling methods as well as other long term investing concepts. John is founder and CEO of Validea.com and also co-founder of Validea Capital Management. Validea Capital runs an actively managed ETF that utilizes the fundamental stock selection models of investing legends as well as a set of robo advisor allocations through Validea Legends and Validea Legends Income. John holds two U.S. patents in the area of automated stock analysis and is considered an expert in the field of quantitative stock selection using the strategies of investing legends. John is a columnist for TheStreet.com, Forbes.com and Canada's Globe & Mail and is co-author of “The Guru Investor: How to Beat the Market Using History’s Best Investment Strategies". He holds a master's of business administration from Harvard Business School and a degree in computer science from MIT.A more complete biography can be found here: http://en.wikipedia.org/wiki/John_P._Reese

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