Strong Quarter For Transportation

Aug. 08, 2022 3:20 AM ETAMOT, CPS, CWH, FDX, GXO, KNX, LCII, THO, XPO, XTN, FTXR, IYT
Todd Sullivan profile picture
Todd Sullivan
7.39K Followers

Summary

  • Transport issues report surprisingly strong quarters with raised guidance.
  • Manufacturing New Orders for Motor Vehicles/Parts has ticked to all-time highs. The Trucking Tonnage Index ((TTI)) is in an uptrend. Vehicles and parts remain in high demand.
  • Signs are present that professional investors have hedged more than any time in past cycles. It is worth repeating the cash versus equity allocation is at levels higher than 2008.

Cargo Transportation Rise

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Transport issues report surprisingly strong quarters with raised guidance. FedEx (FDX), XPO Logistics (XPO), GXO Logistics (GXO) and Knight-Swift Transportation Holdings (KNX) are current suggestions. Manufacturing New Orders for Motor Vehicles/Parts has ticked to all-time highs. The Trucking Tonnage Index (TTI) is in an uptrend. Vehicles and parts remain in high demand. Allied Motion Technologies (AMOT), Cooper-Standard Holdings (CPS), Camping World Holdings (CWH), Thor Industries (THO) and LCI Industries (LCII), which are related to consumer demand, remain current suggestions.

Signs are present that professional investors have hedged more than any time in past cycles. It is worth repeating the cash versus equity allocation is at levels higher than 2008. When one adds all these pieces together, the over-the-top recession fear baked into prices is about as overdone as carbonized toast.

Net percentage taking higher-than-normal risk levels

Net % Taking Higher Than Normal Risk Levels

Source: Blooomberg

Manufacturers' new orders: Motor vehicles and parts

Manufacturers' New Orders: Motor Vehicles And Parts (St. Louis Fed)

Retail sales versus trucking tonnage index

Retail Sales Vs. Trucking Tonnage Index (St. Louis Fed)

When this sentiment turns, it is likely to be a quick turn, with equities rising sharply. Adding to existing positions is recommended.

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

This article was written by

Todd Sullivan profile picture
7.39K Followers
Todd Sullivan is a Massachusetts-based value investor and Co-Founder and General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer supports his original thesis. His blog features his various ideas and general commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain's NY and others. He has also appeared on Fox Business News and is a RealMoney.com contributor. He has twice presented at Bill Ackman's Harbor investment Conference and is a regular presenter at the Manual of Ideas "Best Ideas" conferences. Visit his sites: ValuePlays (http://valueplays.net/) , Rand Strategic Partners (http://randstrategicpartners.com)

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