With a hot Zacks industry Rank of #8 (Top 4%) inside the 256 industries we group together, I found Air Freight and Cargo services worthy of a write-up.
This is a 6-company industry. The obvious U.S. large-cap players FedEx (FDX - Free Report) , a Zacks #3 Rank $181 stock, and UPS (UPS - Free Report) , a Zacks #3 Rank $110 stock, got included.
UPS anticipates cross-border e-commerce volume to grow by +28% over the next three years (2019-2021). UPS shares are stuck in a flat range though.
Fed Ex stock currently holds a Zacks VGM score of A, due to an A for Value and a B for Growth. The forward P/E is a low 11.35. After a big share price plunge late last year, Fed Ex shares look more attractive.
Notably, this top-notch VGM score of A appears to be the base case across the entire niche. Lots of combo Value and Growth plays can be found. “GARP” – Growth at a Reasonable Price – is on full display.
That spells out, loud and clear, a key attraction for stock pickers who have an investment bent. More subtly, those two dominant large-cap domestic players were not what I found most interesting.
Beneath the big two names, I found three small-cap Air Freight and Cargo companies. Their stocks are on fire, with Zacks #1 or #2 (STRONG BUY or BUY) Ranks. They are more global and value-added in terms of freight market focus.
Hence, the names are likely to be companies you’ve never heard about. These are small cap stocks with a top market cap of $1.5B running down to $300M.
The 3 Top Zacks Rank Stocks--
I list the three small-cap stocks in order of market capitalization.
(1) Atlas Air (AAWW - Free Report) : This is a Zacks #2 Rank stock. The Zacks VGM score is A (A for Value, A for Growth, B for Momentum). The market beta is 1.72.
The market cap is $1.5B. The forward P/E is 8.0. Shares trade at $55.50.
Atlas Air Worldwide Holdings, Inc. is the parent company of Atlas Air and Polar Air Cargo, which together operate the world's largest fleet of Boeing freighter aircraft.
AAWW is principally involved in the airport-to-airport air transportation of heavy freight cargo through its two operating subsidiary airlines, Atlas Air, Inc. and Polar Air Cargo, Inc.
AAWW, through its principal subsidiaries Atlas and Polar, offers scheduled air cargo service, cargo charters, military charters, and ACMI aircraft leasing in which customers receive a dedicated aircraft, crew, maintenance and insurance on a long-term lease basis.
(2) Avianca : This is a Zacks #1 Rank stock. The Zacks VGM score is A (A for Value, B for Growth, and A for Momentum). The market beta is 1.03.
The market cap is $384M. The forward P/E is 5.9, as it trades at just $4.85 a share. There is a sweet 5.0% ($0.23 a share) dividend on offer.
Avianca Holdings, S.A. owns and operates airlines. It offers passenger air transportation services and cargo air transportation services.
The company provides its services in the domestic markets of Colombia, Ecuador, and Peru, as well as for international routes, such as North America, Central and South America, Europe, and the Caribbean.
Avianca Holdings, S.A. is based in Panama.
(3) Radiant Logistics : This is a Zacks #2 Rank stock. The Zacks VGM score is straight A’s (A for Value, A for Growth, A for Momentum). The market beta is 1.27.
The market cap is $295M. The forward P/E is 12.68. Shares price at $6.14 each.
Radiant Logistics is executing a strategy to build a global transportation and supply chain Management Company, through organic growth and the strategic acquisition of regional best-of-breed non-asset based transportation and logistics providers.
It offers its customers domestic and international freight forwarding… and an expanding array of value added supply chain management services, including asset recovery and reverse logistics, order fulfillment, inventory management and warehousing.