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| Company Name | Symbol | %Change |
|---|---|---|
| SCIENTIFIC L | SCIL | 8.00% |
| NATUS MEDICA | BABY | 6.11% |
| SUMMER INFAN | SUMR | 6.02% |
| RADIANT LOGI | RLGT | 5.32% |
| NEW ORIENTAL | EDU | 4.51% |
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On January 4, we upgraded our long-term recommendation on Ryder System, Inc. ( R - Analyst Report ) to Outperform from Neutral based on its third quarter performance of the company that reflects improving market demand trends. This leading transportation and supply chain management provider also holds a Zacks #2 Rank (Buy).
Why the Upgrade?
The company reported strong third quarter results with earnings per share substantially surpassing the Zacks Consensus Estimate and increasing 17% from the year-ago level. Over the past four quarters, Ryder has delivered an average surprise of 5.91%.
Following the release of third quarter results, the Zacks Consensus Estimate for fourth quarter earnings has gone up by a penny to $1.10 per share. Though the Zacks Consensus Estimate for 2012 remains unchanged at $3.96, it has gone up by 3 cents to $4.56 for 2013.
Market sentiment remains skewed in the positive direction as the majority of estimates for the fourth quarter, 2012 and 2013 have moved upward, indicating a strong upside in stock price.
We believe the company’s overall growth emerges from significant organic growth across its lines of business. Strong market demand with tighter transportation markets, in particular for trucks, has enabled the company to realize higher pricing. In addition, we expect used vehicle sales and full service lease to continue improving in the near future.
We also foresee favorable growth trends across all its segments, with Fleet Management Solutions showing more promise. This segment will continue to benefit from the acquisition of Hill Hire PLC and organic growth in lease fleet. The company expects greater benefits from new full-term lease contracts compared to extended contracts, reflecting favorable market demand.
Other Stocks to Consider
Besides Ryder System, other stocks in the transportation and supply chain industry worth a look include American Railcar Industries ( ARII - Snapshot Report ) , which has a Zacks #2 Rank (Buy). Similar to Ryder Systems, the company benefited mostly from higher lease revenues coupled with strong locomotive sales.
Read the full reports :
Analyst Report on R
Snapshot Report on ARII