NEW YORK (
) -- The Dow Jones Transportation Average has the weakest year-to-date performance of the major equity indices I follow.
Transports are up just 1.1% so far in 2012, while the
Dow Jones Industrial Average
is up 7.4%, the Russell 2000 has gained 9.4%, the
has risen 12.2% and the
is up 18.0%.
Stubbornly high fuel costs remain an issue for the Transportation sector, which is just 3.1% undervalued, according to
Today I profile the 20 stocks that are tracked by the
iShares Dow Jones Transportation Average
. Five of the stocks are airlines, four are railroads, three are truckers, two are in air & ground freight and package deliveries, five are in transportation services & equipment leasing, and one is in ocean shipping.
The Dow transports are up 28.4% from their October 2011 low at 3950.66 but are down 9.9% from their all-time high of 5627.85 set on July 7, 2011. The decline from the all-time high to the October 2011 low was 29.8%.
The weekly chart for the Dow Jones Transportation Average now shows a declining momentum (12x3x3 weekly slow stochastic) reading falling to 60.93 from 62.39.
The weekly chart will shift to negative on a close this week below its five-week modified moving average at 5124. My semiannual value levels are 4449 and 4129 with a weekly pivot at 5051 and a monthly risky level at 5373.
Source: Thomson Reuters
The above pop-up table shows data from
covering the 20 stocks in the Dow Jones Transportation Average.
Reading the Table
: The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.
: A "1-Engine" rating is a Strong Sell, a "2-Engine" rating is a Sell, a "3-Engine" rating is a Hold, a "4-Engine" rating is a Buy and a "5-Engine" rating is a Strong Buy.
Last 12-Month Return (%)
: Stocks with a red number declined by that percentage over the past 12 months. Stocks with a black number rallied by that percentage over the past 12 months.
Forecast One-Year Return
: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
Analysis of the Transportation Stocks
A look at the overvalued/undervalued data shows that only three of the transportation stocks are overvalued, with
Kansas City Southern
overvalued by 8.2%. The most undervalued is
at 64.4% undervalued
There is one "1-Engine" Strong Sell-rated stock (OSG), 10 "3-Engine" Hold-rated stocks, 11 "4-Engine" Buy-rated stocks, and two "5-Engine" Strong Buy-rated stocks. There are three ratings changes for the airlines this morning.
was downgraded to Hold from Buy,
was upgraded to Buy from Hold and
was downgraded to Hold from Buy.
The best performers over the past 12 months were KSU with a gain of 53.1%,
with a gain of 41.2% and
with a gain of 36.3%. The biggest loser was OSG with a loss of 58.8%.
We do not have a projection on the performance of OSG for the next 12 months, but all others are expected to be higher, led by UNP by 13.6% and
United Parcel Service
Ten of the 20 stocks have elevated price-to-earnings ratios of 15.1 to 23.4.
Value Levels, Pivots and Risky Levels for Seven Transport Stocks
($22.78): My monthly value level is $21.19 with a semiannual pivot at $22.60 and a quarterly risky level at $27.63.
($88.00): My semiannual value level is $82.97 with a weekly pivot at $88.47 and a monthly risky level at $96.15.
JB Hunt ($53.12): My semiannual and annual value levels are $49.82 and $49.52, respectively, with a quarterly risky level at $61.28.
Kansas City Southern ($77.16) tested a multiyear high at $79.50 on May 1. My monthly value level is $73.32 with a quarterly risky level at $80.95.
($73.37): My semiannual value level is $68.50 with an annual risky level at $77.92.
Union Pacific ($123.65) tested a multiyear high at $126.91 on Aug. 3. My quarterly value level is $118.06, with monthly and quarterly risky levels at $124.67 and $132.91, respectively.
United Parcel Service ($75.26) My semiannual and annual value levels are $70.89 and $67.19, respectively, with a weekly pivot at $75.30 and monthly, quarterly and annual risky levels at $78.96, $81.50 and $90.02, respectively.
At the time of publication, Suttmeier had no positions in stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined
in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs
and can be reached at