We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights: ArcBest, USA Truck, Marten Transport, P.A.M. Transportation Services and Saia
Read MoreHide Full Article
For Immediate Release
Chicago, IL – January 20, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: ArcBest Corporation (ARCB - Free Report) , USA Truck, Inc. , Marten Transport, Ltd. (MRTN - Free Report) , P.A.M. Transportation Services, Inc. (PTSI - Free Report) and Saia, Inc. (SAIA - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Where Are Trucking Stocks Headed in 2021?
By all estimates and assumptions, 2021 is going to be a much better year for the economy than 2020 was. Large parts of the population all over the world that were forced to limit travel and socializing are going to be able to do all the things they've been putting off.
And even as many settle down to working from home for the long term, the desire to go out and do just that is creating pent-up demand. This is likely to create a boom in the second half of the year.
So what does all this mean for trucking stocks?
First, it's important to remember that 2020 was a good year for this lot, because ecommerce and last-mile deliveries made up for the weakness in industrial demand. In 2021, the strength in ecommerce, especially for essentials and consumer goods, is unlikely to drop off significantly, at least in the first half of the year. At the same time, industrial demand is likely to come back pretty strongly. This strength is obviously positive for truckers.
Second, widespread vaccination of the population is expected to take 6 months or so (if everyone agrees to get vaccinated), which means there will be a change in spending patterns in the second half of the year. If people really start spending more on services, restaurants, theaters, etc, there will be a corresponding reduction in spending on goods. This is an impending negative for this group in the back half of the year.
Third, the driver crunch remains as bad as ever. Not only did fewer people sign up for driving school in pandemic-hit 2020, but a significant number (around 40,000) of existing drivers dropped out of the workforce because of the federal Drug & Alcohol Clearinghouse's more stringent testing rules. Additionally, some drivers may not even have tried to take the test, for fear of failing it.
The legalization of marijuana in a number of states hasn't helped. It does look like many of the drivers exiting the pool on this ground won't be coming back. The paucity of drivers has the effect of increasing driver compensation, which is of course negative. However, the resultant tightening of capacity has the effect of increasing contract prices as a larger number of loads compete for the available number of trucks.
Fourth, there's a good amount of concern about truck manufacturers falling behind delivery schedules this year, as the pandemic induced significant supply chain disruptions on parts both domestically as well as from China and Mexico. Assemblers are also in high demand as companies struggle to deliver equipment that's being ordered earlier and earlier. This market is likely to return to equilibrium in the second half of the year, which will be a positive for volumes and negative for prices on truckloads.
FTR forecasts a 5% increase in trucking volumes this year from a 4% decline last year, with flatbeds seeing the biggest bounce-back; dry van, reefer and specialized all increasing 6%; and tankers declining 3%. Spot rates are expected to increase 8% this year on top of the 2% increase last year, with contract rates jumping 10%.
So despite the ifs and buts mentioned above, the overall outlook for trucking stocks appears positive. Investors looking for exposure to the industry, which is placed at 69 out of 250+ Zacks-classified industries (top 27%) could consider the following stocks-
ArcBest looks good with a Zacks Rank #1, VGM Score A, expected revenue and earnings growth rate of a respective 8.9% and 20.9%, and earnings ESP of 0.95% (indicating chances of a positive surprise when it reports results).
USA Truck also looks ripe for the picking with its Zacks #1 Rank, VGM Score A, and expected revenue and earnings growth rates of 12.4% and 217.1%, respectively. Its earnings ESP of 0.0% coupled with the buy rating is also indicative of a positive earnings surprise.
Marten Transport has a Zacks Rank #2 (Buy), VGM Score A, and expected revenue and earnings growth rates of 7.2% and 15.0%, respectively. Its earnings ESP of 0.0% coupled with the buy rating is also indicative of a positive earnings surprise.
Like Marten, P.A.M. Transportation Services also has a Zacks Rank #2 (Buy) and VGM Score A. It too is expected to grow revenue and earnings this year at a rate of 13.9% and 94.6%, respectively. Its earnings ESP of 0.0% coupled with the buy rating is also indicative of a positive earnings surprise.
Saia too has a Zacks Rank #2 (Buy) and VGM Score A. It is expected to grow revenue 10.3% and earnings 26.6% this year. And its 3.1% ESP along with the buy rating points to the possibility of a positive earnings surprise.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights: ArcBest, USA Truck, Marten Transport, P.A.M. Transportation Services and Saia
For Immediate Release
Chicago, IL – January 20, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: ArcBest Corporation (ARCB - Free Report) , USA Truck, Inc. , Marten Transport, Ltd. (MRTN - Free Report) , P.A.M. Transportation Services, Inc. (PTSI - Free Report) and Saia, Inc. (SAIA - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Where Are Trucking Stocks Headed in 2021?
By all estimates and assumptions, 2021 is going to be a much better year for the economy than 2020 was. Large parts of the population all over the world that were forced to limit travel and socializing are going to be able to do all the things they've been putting off.
And even as many settle down to working from home for the long term, the desire to go out and do just that is creating pent-up demand. This is likely to create a boom in the second half of the year.
So what does all this mean for trucking stocks?
First, it's important to remember that 2020 was a good year for this lot, because ecommerce and last-mile deliveries made up for the weakness in industrial demand. In 2021, the strength in ecommerce, especially for essentials and consumer goods, is unlikely to drop off significantly, at least in the first half of the year. At the same time, industrial demand is likely to come back pretty strongly. This strength is obviously positive for truckers.
Second, widespread vaccination of the population is expected to take 6 months or so (if everyone agrees to get vaccinated), which means there will be a change in spending patterns in the second half of the year. If people really start spending more on services, restaurants, theaters, etc, there will be a corresponding reduction in spending on goods. This is an impending negative for this group in the back half of the year.
Third, the driver crunch remains as bad as ever. Not only did fewer people sign up for driving school in pandemic-hit 2020, but a significant number (around 40,000) of existing drivers dropped out of the workforce because of the federal Drug & Alcohol Clearinghouse's more stringent testing rules. Additionally, some drivers may not even have tried to take the test, for fear of failing it.
The legalization of marijuana in a number of states hasn't helped. It does look like many of the drivers exiting the pool on this ground won't be coming back. The paucity of drivers has the effect of increasing driver compensation, which is of course negative. However, the resultant tightening of capacity has the effect of increasing contract prices as a larger number of loads compete for the available number of trucks.
Fourth, there's a good amount of concern about truck manufacturers falling behind delivery schedules this year, as the pandemic induced significant supply chain disruptions on parts both domestically as well as from China and Mexico. Assemblers are also in high demand as companies struggle to deliver equipment that's being ordered earlier and earlier. This market is likely to return to equilibrium in the second half of the year, which will be a positive for volumes and negative for prices on truckloads.
FTR forecasts a 5% increase in trucking volumes this year from a 4% decline last year, with flatbeds seeing the biggest bounce-back; dry van, reefer and specialized all increasing 6%; and tankers declining 3%. Spot rates are expected to increase 8% this year on top of the 2% increase last year, with contract rates jumping 10%.
So despite the ifs and buts mentioned above, the overall outlook for trucking stocks appears positive. Investors looking for exposure to the industry, which is placed at 69 out of 250+ Zacks-classified industries (top 27%) could consider the following stocks-
ArcBest looks good with a Zacks Rank #1, VGM Score A, expected revenue and earnings growth rate of a respective 8.9% and 20.9%, and earnings ESP of 0.95% (indicating chances of a positive surprise when it reports results).
USA Truck also looks ripe for the picking with its Zacks #1 Rank, VGM Score A, and expected revenue and earnings growth rates of 12.4% and 217.1%, respectively. Its earnings ESP of 0.0% coupled with the buy rating is also indicative of a positive earnings surprise.
Marten Transport has a Zacks Rank #2 (Buy), VGM Score A, and expected revenue and earnings growth rates of 7.2% and 15.0%, respectively. Its earnings ESP of 0.0% coupled with the buy rating is also indicative of a positive earnings surprise.
Like Marten, P.A.M. Transportation Services also has a Zacks Rank #2 (Buy) and VGM Score A. It too is expected to grow revenue and earnings this year at a rate of 13.9% and 94.6%, respectively. Its earnings ESP of 0.0% coupled with the buy rating is also indicative of a positive earnings surprise.
Saia too has a Zacks Rank #2 (Buy) and VGM Score A. It is expected to grow revenue 10.3% and earnings 26.6% this year. And its 3.1% ESP along with the buy rating points to the possibility of a positive earnings surprise.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.