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Stocks have gotten off to a nice start in 2023, certainly a welcomed development following a challenging 2022.
Signs of easing inflation paired with some better-than-expected earnings results from big banks such as Bank of America (BAC - Free Report) , Wells Fargo (WFC - Free Report) , Morgan Stanley (MS - Free Report) , and JPMorgan Chase & Co. (JPM - Free Report) have both helped keep the market afloat.
And with earnings season kicking into higher gear, investors will have plenty of quarterly releases to dive into. A few highly-anticipated quarterly prints this week will come from Netflix (NFLX - Free Report) , Discover Financial Services (DFS - Free Report) , and Procter & Gamble (PG - Free Report) .
With the calendar flipped and some investors looking for new stocks, it’s beneficial to remember the importance of targeting sectors with bright outlooks.
That’s precisely what the Zacks – Transportation sector has displayed, currently ranked #1 out of all 16 Zacks sectors thanks to positive earnings estimate revisions.
Three stocks from the realm – Teekay Tankers Ltd. (TNK - Free Report) , Scorpio Tankers (STNG - Free Report) , and International Seaways (INSW - Free Report) – could all be considerations for those looking to tap into the sector’s favorable outlook.
Below is a chart illustrating the performance of all three stocks over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Scorpio Tankers
Scorpio Tankers Inc. provides marine transportation of petroleum products worldwide for integrated oil companies, oil traders, and other customers. The company sports a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
STNG hasn’t had any issues exceeding quarterly estimates, surpassing EPS and revenue expectations in four consecutive quarters. In its latest release, STNG registered a 12.6% earnings beat paired with a 9% revenue surprise.
Image Source: Zacks Investment Research
International Seaways
International Seaways is a tanker company providing energy transportation services for crude oil and petroleum products.
Analysts have raised their earnings outlook across all timeframes over the last several months, landing INSW into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
In addition, the company does pay a dividend, currently yielding a modest 1.3%. While the yield is lower than its Zacks sector average, the company’s 30% five-year annualized dividend growth rate helps pick up the slack.
Image Source: Zacks Investment Research
For the cherry on top, International Seaways has a strong growth trajectory; the Zacks Consensus EPS Estimate of $7.20 for its current fiscal year (FY22) indicates a sizable 421% Y/Y change. And in FY23, the company’s earnings are expected to grow a further 25%.
Teekay Tankers Ltd.
Teekay Tankers Ltd. was formed by Teekay Corporation to provide international marine transportation of crude oil. Currently, TNK boasts a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
It’s hard to ignore the company’s growth profile, with earnings forecasted to soar more than 240% in its current fiscal year (FY22) and a further 140% in FY23.
The projected earnings growth comes on top of forecasted Y/Y revenue upticks of 160% in FY22 and 92% in FY23.
And with such strong projected growth, TNK shares aren’t expensive; the company’s shares trade at a forward price-to-sales ratio of 0.9X, precisely in line with the five-year median and nicely beneath its Zacks sector average.
Image Source: Zacks Investment Research
Bottom Line
Targeting stocks in sectors witnessing rising earnings estimate revisions is an excellent way for investors to find themselves in favorable market trends, as these companies’ near-term business outlooks have recently turned fruitful.
And all three stocks above – Teekay Tankers Ltd. (TNK - Free Report) , Scorpio Tankers (STNG - Free Report) , and International Seaways (INSW - Free Report) – could be considerations for investors looking to tap into the favorable outlook for the Zacks Transportation sector.
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3 Top Picks From a Hot Transportation Industry
Stocks have gotten off to a nice start in 2023, certainly a welcomed development following a challenging 2022.
Signs of easing inflation paired with some better-than-expected earnings results from big banks such as Bank of America (BAC - Free Report) , Wells Fargo (WFC - Free Report) , Morgan Stanley (MS - Free Report) , and JPMorgan Chase & Co. (JPM - Free Report) have both helped keep the market afloat.
And with earnings season kicking into higher gear, investors will have plenty of quarterly releases to dive into. A few highly-anticipated quarterly prints this week will come from Netflix (NFLX - Free Report) , Discover Financial Services (DFS - Free Report) , and Procter & Gamble (PG - Free Report) .
With the calendar flipped and some investors looking for new stocks, it’s beneficial to remember the importance of targeting sectors with bright outlooks.
That’s precisely what the Zacks – Transportation sector has displayed, currently ranked #1 out of all 16 Zacks sectors thanks to positive earnings estimate revisions.
Three stocks from the realm – Teekay Tankers Ltd. (TNK - Free Report) , Scorpio Tankers (STNG - Free Report) , and International Seaways (INSW - Free Report) – could all be considerations for those looking to tap into the sector’s favorable outlook.
Below is a chart illustrating the performance of all three stocks over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Scorpio Tankers
Scorpio Tankers Inc. provides marine transportation of petroleum products worldwide for integrated oil companies, oil traders, and other customers. The company sports a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
STNG hasn’t had any issues exceeding quarterly estimates, surpassing EPS and revenue expectations in four consecutive quarters. In its latest release, STNG registered a 12.6% earnings beat paired with a 9% revenue surprise.
Image Source: Zacks Investment Research
International Seaways
International Seaways is a tanker company providing energy transportation services for crude oil and petroleum products.
Analysts have raised their earnings outlook across all timeframes over the last several months, landing INSW into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
In addition, the company does pay a dividend, currently yielding a modest 1.3%. While the yield is lower than its Zacks sector average, the company’s 30% five-year annualized dividend growth rate helps pick up the slack.
Image Source: Zacks Investment Research
For the cherry on top, International Seaways has a strong growth trajectory; the Zacks Consensus EPS Estimate of $7.20 for its current fiscal year (FY22) indicates a sizable 421% Y/Y change. And in FY23, the company’s earnings are expected to grow a further 25%.
Teekay Tankers Ltd.
Teekay Tankers Ltd. was formed by Teekay Corporation to provide international marine transportation of crude oil. Currently, TNK boasts a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
It’s hard to ignore the company’s growth profile, with earnings forecasted to soar more than 240% in its current fiscal year (FY22) and a further 140% in FY23.
The projected earnings growth comes on top of forecasted Y/Y revenue upticks of 160% in FY22 and 92% in FY23.
And with such strong projected growth, TNK shares aren’t expensive; the company’s shares trade at a forward price-to-sales ratio of 0.9X, precisely in line with the five-year median and nicely beneath its Zacks sector average.
Image Source: Zacks Investment Research
Bottom Line
Targeting stocks in sectors witnessing rising earnings estimate revisions is an excellent way for investors to find themselves in favorable market trends, as these companies’ near-term business outlooks have recently turned fruitful.
And all three stocks above – Teekay Tankers Ltd. (TNK - Free Report) , Scorpio Tankers (STNG - Free Report) , and International Seaways (INSW - Free Report) – could be considerations for investors looking to tap into the favorable outlook for the Zacks Transportation sector.