NEW YORK (AP) Shares of several transportation companies rose on Friday, and one analyst laid out the case for why worries about transportation may be overdone.
Stifel Nicolaus analyst David G. Ross wrote that industry growth at the moment is minimal, with retailers cautious and keeping inventories low, and West Coast imports slowing.
Any easing of economic fears "should lead to a nice pickup in demand, in our opinion, as there is no housing bubble left to pop, no auto bubble left to pop, fuel prices have been declining (which is a decent tailwind for consumer spending), unemployment is relatively stable, borrowing rates are expected to remain low and the population is growing," he wrote. "That's why our fear of a recession is less than others. We could be wrong, but we still see more upside than downside over the next couple of years."
Also, the economic uncertainty is causing trucking companies to limit capacity. That will help them keep prices higher for longer, he wrote.Even in the spring, as an economic recovery appeared under way, transportation companies including truckers and airlines were dealing with high fuel prices. Those prices appear to be falling now but they were driven lower by economic fears, which aren't helping transportation companies, either. Ross said good management, stable balance sheets, and strong positions in the industry should help FedEx Corp., Old Dominion Freight Line Inc., Heartland Express Inc., and Ryder System Inc. Swift Transportation Co. should benefit if the economy grows, he wrote. FedEx shares rose 72 cents to $80.60 in afternoon trading. Old Dominion rose $1.49, or 5 percent, to $32.49, Heartland Express rose 36 cents, or 2.6 percent, to $14.17, Ryder rose 83 cents to $46.43. Swift jumped 48 cents, or 6 percent, to $8.41. Other transportation shares rising included United Parcel Service Inc., up 65 cents to $65.37, and Union Pacific Corp., up 86 cents to $92.84.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV