The main points highlighted in my last commentary on the trucking market generally hold true even today- First, goods consumption remains higher than services consumption even with more services coming back now. This has been a positive for trucking companies since most goods consumed have been on a truck at some point in time. Real GDP increased 33.1% in the third quarter, up from the 31.4% decline in the second, according to initial estimates from the Bureau of Economic Analysis (BEA). Reading these two together, the increase in goods sales is apparent. Second, we continue to buy more stuff online than we do at stores. This increases trucking opportunities. And while the Commerce Department hasn’t released ecommerce data for the third quarter, the monthly sales data released on Oct 16 shows a positive trend. Total sales increased over 1% in July, dipped close to 0.5% in August before climbing to around 2% in September. Moreover, total sales for the July 2020 through September 2020 period were up 3.6% (± 0.5%) from the same period a year ago. eMarketer estimates that the strength in ecommerce will offset the 3.2% decline in brick-and-mortar spending this year. Third, stimulus money has helped drive sales. And fourth, demand hasn’t been even across industries and all industries haven’t been equally impacted by the pandemic. So supply chain issues have pushed up spot rates. This again impacts contract rates, which are typically influenced by the spot rate. Contracts make up 80-85% of total trucking orders but they aren’t intended to lock in rates as in other industries. Rather they lock in the load, i.e. a certain company uses a contract to ensure regular delivery of what it produces. Fast moving consumer goods, furniture, vehicles, food and beverages have naturally eclipsed things like apparel and industrial/manufacturing items in the last few months. Many durable goods were imported, so transporting those to warehouses generated some of the extra demand for trucking. With spending patterns being more conservative this year than most, the holiday season is expected to have started earlier. That means things like apparel, cosmetics, toys and such things are on the road now. The market should soften slightly in the final quarter of the year as holiday demand tapers off. Let’s take a look at the numbers- The DAT October Truckload Volume Index, which measures dry van, reefer and flatbed loads moved by truckload carriers, is up 3.8% from September and 8.7% from October 2019. The index is a function of load-to-truck ratio (the number of loads available per available truck or LTR) and rates- Dry Van: LTR was 4.3 in October, down 21.8% from September’s historic highs but more than double the ratio in October 2019. The spot van rate was $2.40 per mile, up 3 cents month over month and up 60 cents from October 2019. Reefer: LTR was 8.7 in October, down 10.3% from September. The spot reefer rate was $2.59 per mile, up 2 cents from September and up 48 cents from last year. Flatbed: LTR was 37.1 in October, down 7.9% from September, despite a 1.6% increase in volume, indicating capacity adds. The spot flatbed rate was $2.45 per mile, up 4 cents from September and 28 cents from October 2019. So it’s apparent that there has been some easing in load rates since September highs. But because capacity is still much lower than demand, trucking backlogs and pricing continue to increase. Given the opportunity, trucking stocks continue to look attractive. Here are a few you could add to your portfolio- ArcBest Corporation ( ARCB Quick Quote ARCB - Free Report) Factors to consider- Zacks Rank #1 Value Score A Growth Score B Momentum Score A 2020 revenue and EPS expected to grow -2.4% and 5.9%, respectively. 2021 revenue and EPS expected to grow 7.8% and 14.6%, respectively. 2020 estimate up 78 cents (34.4%) and 2021 estimate up 67 cents (23.8%) in the last 30 days. Valuation: Forward P/E of 11.12X is below the median value of 11.34X. So valuation is attractive. KnightSwift Transportation Holdings Inc. ( KNX Quick Quote KNX - Free Report) Factors to consider- Zacks Rank #1 Value Score A 2020 revenue and EPS expected to grow -3.6% and 24.9%, respectively. 2021 revenue and EPS expected to grow 8.8% and 22.5%, respectively. 2020 estimate up 39 cents (16.8%) and 2021 estimate up 54 cents (19.4%) in the last 30 days. Valuation: Forward P/E of 12.87X is below the median value of 17.65X. So valuation is attractive. Landstar System, Inc. ( LSTR Quick Quote LSTR - Free Report) Factors to consider- Zacks Rank #2 Value Score B 2020 revenue and EPS expected to grow -1.9% and -13.5%, respectively. 2021 revenue and EPS expected to grow 9.4% and 24.9%, respectively (both numbers well above 2019 level). 2020 estimate up 56 cents (12.8%) and 2021 estimate up 69 cents (12.6%) in the last 30 days. Valuation: Forward P/E of 21.85X is at the median value of 21.85X. So valuation is relatively attractive. P.A.M. Transportation Services, Inc. ( PTSI Quick Quote PTSI - Free Report) Factors to consider- Zacks Rank #1 Value Score A Growth Score B Momentum Score B 2020 revenue and EPS expected to grow -8.8% and -44.6%, respectively. 2021 revenue and EPS expected to grow 12.6% and 90.9%, respectively (both numbers above 2019 level). 2020 estimate up 69 cents (45.4%) and 2021 estimate up $1.06 (33.5%) in the last 30 days. Valuation: Forward P/E of 12.05X is closer to the median value of 11.93X than the annual high of 17.42X. So valuation is relatively attractive. Forward Air Corporation ( FWRD Quick Quote FWRD - Free Report) Factors to consider- Zacks Rank #2 Value Score B 2020 revenue and EPS expected to grow -9.2% and -31.9%, respectively. 2021 revenue and EPS expected to grow 8.1% and 39.3%, respectively (both numbers below 2019 level). 2020 estimate up 37 cents (21.8%) and 2021 estimate up 24 cents (9.1%) in the last 30 days. Valuation: Forward P/E of 26.74X is between the median value of 23.65X and the annual high of 28.05X. So there is scope for upside. Legal Marijuana: An Investor’s Dream Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027. Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. 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