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5 Trucking Stocks to Drive Into Earnings Beat in Q2
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U.S. trucking industry has been witnessing significant demand in recent months. The trucking industry is the lifeblood of the economy as it moves more than 70% of the nation’s freight by volume. Truck transport is a “derived demand” industry, which means requirement for truckers depends on the demand for the products that trucks haul. Consequently, trucking serves as a barometer of the U.S. economy.
As the U.S. economy continues to grow, demand for carriage is also increasing and this momentum is expected to sustain in 2018. Let us, focus on trucking stocks positioned to report upbeat earnings results, which will eventually lead to an uptick in share price.
Robust Demand for Truckers
Trucking industry is currently benefiting from three factors. Firstly, the U.S. economy is on solid footing. In its 2017-2018 Freight Transportation Forecast, the American Trucking Association (“ATA”) has predicted that there will be persistent growth for truckers driven by manufacturing, consumer spending and international trade over the next 12 years.
Secondly, the trucking industry is currently facing capacity crunch. A healthy labor market with unemployment rate at its lowest in nearly 18 years, resulted in severe shortages of drivers. This has raised the price for truckers.
Thirdly, significant cut in tax is major catalysts for the truckers. The corporate tax rate was lowered from 35% to 21%. A large part of truckers book much of their revenues in the homeland. Consequently, a significant reduction in corporate tax rate borne by truckers would be immediately accretive to cash flow.
Zacks Favors Transportation -Truck Industry
The Transportation Sector is currently poised well in the top 19% (3 out of 16) from the Zacks Sector Rank perspective. The Trucking industry is currently in the top 7% (18 out of 256) of the Zacks categorized industries, suggesting it is well-positioned. Historically, the top 50% of the Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
For the Transportation sector, of which the trucking industry is a major earnings contributor, total Q2 earnings are expected to be up 12.9% from the same period last year on 8% higher revenues. This would follow 21.3% earnings growth in the preceding quarter on 9% higher revenues. (Read More: Market Unimpressed with Bank Earnings)
Our Picks
A robust U.S. economy, strong manufacturing growth, massive tax haul and business friendly policies of the government are anticipated to fuel trucking industry’s growth.
We have selected five trucking stocks, which are expected to report a significant uptick in second-quarter earnings. These stocks have a positive Earnings ESP — our proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.
Additionally, these stocks also carry a VGM Score of A. Our VGM Score comes in handy in order to pick winning stocks. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM Score.
The chart below depicts price performance of our five picks year to date.
Werner Enterprises Inc. (WERN - Free Report) is engaged in hauling truckload shipments of general commodities in both interstate and intrastate commerce. It has an Earnings ESP of + 3.4%.
Werner Enterprises will release second-quarter 2018 earnings results on Jul 23. The company has expected earnings growth of 59.8% for current year. The Zacks Consensus Estimate for the current year has improved by 0.5% over the last 30 days.
Landstar System Inc. (LSTR - Free Report) delivers safe, specialized transportation services to a broad range of customers utilizing a network of agents, third-party capacity owners and employees. It has an Earnings ESP of + 0.6%.
Landstar System will release second-quarter 2018 earnings results on Jul 26. The company has expected earnings growth of 55.5% for current year. The Zacks Consensus Estimate for the current year has improved by 0.9% over the last 30 days.
Old Dominion Freight Line Inc. (ODFL - Free Report) is a leading, LTL, union-free company providing super-regional and national LTL service. It has an Earnings ESP of + 0.5%.
Old Dominion will release second-quarter 2018 earnings results on Jul 26. The company has expected earnings growth of 48.6% for current year. The Zacks Consensus Estimate for the current year has improved by 0.9% over the last 30 days.
ArcBest Corp. (ARCB - Free Report) provides freight transportation services and solutions across the United States and internationally. It has an Earnings ESP of + 2.7%.
ArcBest will release second-quarter 2018 earnings results on Jul 31. The company has expected earnings growth of 120.3% for current year. The Zacks Consensus Estimate for the current year has improved by 1.4% over the last 30 days.
Saia Inc. (SAIA - Free Report) is a leading LTL transportation company that provides a variety of trucking transportation and supply chain solutions to a broad range of industries. It has an Earnings ESP of + 0.9%.
Saia will release second-quarter 2018 earnings results on Aug 1. The company has expected earnings growth of 74.4% for current year. The Zacks Consensus Estimate for the current year has improved by 0.5% over the last 30 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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5 Trucking Stocks to Drive Into Earnings Beat in Q2
U.S. trucking industry has been witnessing significant demand in recent months. The trucking industry is the lifeblood of the economy as it moves more than 70% of the nation’s freight by volume. Truck transport is a “derived demand” industry, which means requirement for truckers depends on the demand for the products that trucks haul. Consequently, trucking serves as a barometer of the U.S. economy.
As the U.S. economy continues to grow, demand for carriage is also increasing and this momentum is expected to sustain in 2018. Let us, focus on trucking stocks positioned to report upbeat earnings results, which will eventually lead to an uptick in share price.
Robust Demand for Truckers
Trucking industry is currently benefiting from three factors. Firstly, the U.S. economy is on solid footing. In its 2017-2018 Freight Transportation Forecast, the American Trucking Association (“ATA”) has predicted that there will be persistent growth for truckers driven by manufacturing, consumer spending and international trade over the next 12 years.
Secondly, the trucking industry is currently facing capacity crunch. A healthy labor market with unemployment rate at its lowest in nearly 18 years, resulted in severe shortages of drivers. This has raised the price for truckers.
Thirdly, significant cut in tax is major catalysts for the truckers. The corporate tax rate was lowered from 35% to 21%. A large part of truckers book much of their revenues in the homeland. Consequently, a significant reduction in corporate tax rate borne by truckers would be immediately accretive to cash flow.
Zacks Favors Transportation -Truck Industry
The Transportation Sector is currently poised well in the top 19% (3 out of 16) from the Zacks Sector Rank perspective. The Trucking industry is currently in the top 7% (18 out of 256) of the Zacks categorized industries, suggesting it is well-positioned. Historically, the top 50% of the Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
For the Transportation sector, of which the trucking industry is a major earnings contributor, total Q2 earnings are expected to be up 12.9% from the same period last year on 8% higher revenues. This would follow 21.3% earnings growth in the preceding quarter on 9% higher revenues. (Read More: Market Unimpressed with Bank Earnings)
Our Picks
A robust U.S. economy, strong manufacturing growth, massive tax haul and business friendly policies of the government are anticipated to fuel trucking industry’s growth.
We have selected five trucking stocks, which are expected to report a significant uptick in second-quarter earnings. These stocks have a positive Earnings ESP — our proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.
Moreover, all five stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Additionally, these stocks also carry a VGM Score of A. Our VGM Score comes in handy in order to pick winning stocks. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM Score.
The chart below depicts price performance of our five picks year to date.
Werner Enterprises Inc. (WERN - Free Report) is engaged in hauling truckload shipments of general commodities in both interstate and intrastate commerce. It has an Earnings ESP of + 3.4%.
Werner Enterprises will release second-quarter 2018 earnings results on Jul 23. The company has expected earnings growth of 59.8% for current year. The Zacks Consensus Estimate for the current year has improved by 0.5% over the last 30 days.
Landstar System Inc. (LSTR - Free Report) delivers safe, specialized transportation services to a broad range of customers utilizing a network of agents, third-party capacity owners and employees. It has an Earnings ESP of + 0.6%.
Landstar System will release second-quarter 2018 earnings results on Jul 26. The company has expected earnings growth of 55.5% for current year. The Zacks Consensus Estimate for the current year has improved by 0.9% over the last 30 days.
Old Dominion Freight Line Inc. (ODFL - Free Report) is a leading, LTL, union-free company providing super-regional and national LTL service. It has an Earnings ESP of + 0.5%.
Old Dominion will release second-quarter 2018 earnings results on Jul 26. The company has expected earnings growth of 48.6% for current year. The Zacks Consensus Estimate for the current year has improved by 0.9% over the last 30 days.
ArcBest Corp. (ARCB - Free Report) provides freight transportation services and solutions across the United States and internationally. It has an Earnings ESP of + 2.7%.
ArcBest will release second-quarter 2018 earnings results on Jul 31. The company has expected earnings growth of 120.3% for current year. The Zacks Consensus Estimate for the current year has improved by 1.4% over the last 30 days.
Saia Inc. (SAIA - Free Report) is a leading LTL transportation company that provides a variety of trucking transportation and supply chain solutions to a broad range of industries. It has an Earnings ESP of + 0.9%.
Saia will release second-quarter 2018 earnings results on Aug 1. The company has expected earnings growth of 74.4% for current year. The Zacks Consensus Estimate for the current year has improved by 0.5% over the last 30 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>