NEW YORK ( TheStreet) -- Covenant Transportation Group ( CVTI), Quality Distribution ( QLTY) and Standard Parking ( STAN) are among 10 stocks that have upside potential of 7% to 35%, as per analysts polled by Bloomberg.

Industrial production in the U.S. is expected to increase by more than 3% in 2011, improving the earnings outlook for intermodal traffic comprising of containers and trailers. On a year-to-date basis, auto data for the U.S. showed a 30% jump in light truck sales, positioning surface transport on strong ground, after the gloom in 2009.

As per the American Trucking Association (ATA), seasonally adjusted (SA) for-hire truck tonnage index was up 2.2% in December 2010, pushing the SA index to 111.6 -- the highest since September 2008. Furthermore, ATA chief economist expects truck freight tonnage to grow modestly during the first half of 2011 and accelerate in the latter half of the year into 2012.
10. Landstar System ( LSTR) provides freight transportation services and supply chain solutions. The company operates in two segments: Transportation logistics and Insurance. The company has cross-border operations -- U.S-Canada and U.S-Canada- Mexico, and to a smaller extent in other countries worldwide.

For 2010 fourth quarter, the company reported net income of $24.1 million, compared to $18.6 million during the same quarter a year-ago. Revenue for the quarter increased to $587.5 million from $547.7 million in the fourth quarter of 2009. For full-year 2010, revenue and net income were up 19.5% and 23.8% respectively.

With the trucking industry gaining momentum in 2010 and demand volume growing, trucker companies are likely to benefit significantly in 2011. Moreover, as per the U.S. Bureau of Economic Analysis, the trucking industry contributes about 5% to GDP each year.

Of the 22 analysts covering the stock, 73% recommend a buy while the remaining rate a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 7.2% to $48.6 in value from current levels.

9. Werner Enterprises ( WERN) is a premier transportation and logistics company offering diversified services that include hauling truckload shipments of general commodities in both interstate and intrastate commerce. Besides, it also has a portfolio of value added services (VAS).

For fourth quarter ending December 31, 2010, revenue was up 5% to $463.2 million. Net income jumped 34% to $24.1 million. For full-year 2010, revenue and net income were up 9% and 41%, respectively.

During the first half of 2011, the company expects a major portion of its business to become eligible for rate increases through contractual renewals, or re-pricing opportunities. For 2011, the company intends to increase its capital expenditure to a range of $150 to $200 million from $119 million in 2010.

Of the 24 analysts covering the stock, 58% recommend a buy and 38% rate a hold. Analysts polled by Bloomberg expect the stock to gain almost 8.2% from current levels to $27 over the next 12 months.

8. Kansas City Southern ( KSU) is a holding company with domestic and international rail operations in North America with major focus on the north/south freight corridor connecting key commercial and industrial markets in central U.S. with industrial cities in Mexico.

Revenue for the fourth quarter was up 18% and operating ratio stood at a record high 71.8%. Net income for the quarter surged 62.7% to $52 million. For full-year 2010, revenue was up 23%, while net income soared 164.3% to $180 million.

The company recently declared a regular quarterly dividend of 25 cents per share, payable April 5, 2011, on its outstanding 4% non-cumulative preferred stock. Further, the company paid $12.8 per share on the outstanding 5.125% cumulative convertible perpetual preferred stock. Going forward, the company estimates to achieve low double-digit revenue growth in 2011.

Of the 19 analysts covering the stock, 68% recommend a buy while the remaining rate a hold. There are no sell ratings on the stock. Data from Bloomberg has analysts estimating an 8.9% gain for the stock to $58.8 in value from current levels.

7. Swift Transportation ( SWFT) operates as a truckload carrier in North America, providing rail intermodal, freight brokerage services, and third-party logistics operations. The company handles short-to-medium-haul traffic lanes around its terminals.

For the fourth quarter of 2010, the company reported $48.31 million net loss, or 66 cents per share, as against a net loss of $357.13 million in the year-ago quarter. Revenue grew to $780.43 million from $668.3 million for the fourth quarter of 2009. For full-year 2010, net loss more than doubled to $125.41 million, or $1.98 per share. Revenue for 2010 advanced 14% to $2.93 billion.

Swift Transportation is seeking to refinance $1.01 billion loan with price of 350 bps more than the London interbank rate. Sources with knowledge of the refinancing program say investors would be offered a one-year soft-call protection of $1.01, meaning Swift would have to pay 1-cent premium over face value to refinance the debt in the first year.

Of the 15 analysts covering the stock, 80% recommend a buy while the remaining suggest a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 17.4% from current levels to $17.7 over the next 12 months.

6. Hertz Global Holdings ( HTZ) is a general use car rental brand engaged in equipment rental businesses in the U.S. and Canada. The company operates in two business segments: Car rental, which it accepts at 8,100 locations in approximately 145 countries; and Equipment rental through 322 branches in the U.S., Canada, France, Spain, and China and through international licensing.

Earnings for 2010 fourth quarter, excluding non-cash debt and restructuring charges, were up 10 cents from the year-ago quarter of 6 cents. Revenue zoomed 5.5% to $1.84 billion. Heading into 2011, the company expects revenue in the range of $7.95-$8.1 billion and EBITDA of $1.27-$1.30 billion. Meanwhile, net income is seen in the range of $330-$355 million.

Renault recently signed a deal offering its electric vehicles to Hertz fleets and car-sharing club Connect across Europe. Hertz plans to add 500 units of the Renault range to its fleet over the next two years in Europe. The company recently forayed into Australia and New Zealand by acquiring New Zealand's Ace Rental Cars, the country's second-largest discount car rental company.

Of the 11 analysts covering the stock, 82% recommend a buy while 9% rate a hold. Analysts polled by Bloomberg expect the stock to gain 20.3% to $47.2 from current levels over the next 12 months.

5. USA Truck ( USAK) is a nationwide truckload carrier specializing in general commodities across the U.S., into and out of Mexico and parts of Canada. The company provides brokerage and rail intermodal services. Its operating segments are Trucking and Strategic Capacity Solutions.

The company recently reported its fourth quarter and full-year 2010 financial results. For the quarter ended Dec. 31, 2010, net loss narrowed to $1.8 million, or 17 cents per share, compared to $2.51 million, or 24 cents per share, in the year-ago quarter. Total revenue increased to $122.09 million from $100.32 million earlier. For full-year 2010, net loss narrowed by more than 0.5% to $3.31 million, or 32 cents per share, and revenue grew 20.3% to $460.16 million.

The company recently adopted SkyBitz for its trailer tracking technology for efficient asset utilization across its fleet, and for enhancing customer satisfaction through improved asset allocation and logistics and load security.

Sixty-seven percent of analysts covering the stock recommend a buy on it, while the remaining rate a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 20.3% from current levels to $16.1 over the next 12 months.

4. Celadon Group ( CGI) offers a portfolio of truckload transportation services in the U.S., including long haul, regional, dedicated, less-than-truckload, intermodal, and logistics. The company's two largest trading partners are Mexico and Canada.

For its first quarter ending Dec. 31, 2010, Celadon reported a 25.9% increase in revenue to $1.12 billion. Meanwhile, net income escalated 13.8% to $126.6 million with earnings per share of 45 cents. As of Dec. 31, 2010, the company's backlog of signed orders stood at $13.1 billion, or triple annual revenue. The company holds a strong liquidity position with $700 million in available capital, including $80 million in cash and cash equivalents as well as $600 million under its line of credit secured through 2012.

Going forward, the company believes that increased client project visibility and merger with Stanley will prove positive and improve profitability in 2011. Celadon plans to extend its share buyback program to February 2012, as it delivers attractive returns to shareholders.

Eighty percent of analysts covering the stock recommend a buy on it, while the remaining suggest a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain 21.1% from current levels to $18.2 over the next 12 months.

3. Standard Parking ( STAN) is a provider of outsourced parking facility management services in the U.S. and Canada, including on-site parking and surface transportation services and certain customer and ancillary services.

The company will report its fourth quarter and full-year 2010 financial results on March 10, 2011. The U.S. government estimates a 100% increase in revenue from parking tickets in 2011. Moreover, the standard parking fine increased from $50 to $75 if paid within 14 days and $100 after 14 days. According to the Budget Book, the government expects to accumulate $1.5 million from parking fines, compared to $750,000 forecasted for 2010.

Eighty-three percent of analysts covering the stock rate it a buy and the remaining advise a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 26.6% from current levels to $24 over the next 12 months.

2. Quality Distribution ( QLTY), operating through its wholly owned subsidiary Quality Carriers, engages in truckload transportation of bulk chemicals and container services, primarily ISO tank container and depot services, in North America.

The company is scheduled to report its fourth quarter and full-year 2010 results on March 9, 2011. Analysts polled by Bloomberg calculate the company's fourth quarter earnings per share at 6 cents on sales of $165 million, compared to earnings of 1 cent per share on sales of $151.2 million recorded during the same quarter a year ago. For full-year 2010, net income and revenue are likely to jump 365% and 12%, respectively from 2009.

Earlier in February, Quality Distribution completed a public offering of approximately 4 million shares of its common stock priced at $9.5 per share. The company intends to use the proceeds to repay or refinance its indebtedness and for general corporate purposes.

Of the nine analysts covering the stock, 67% recommend a buy and 22% suggest a hold. Analysts polled by Bloomberg expect the stock to gain an average 31% from current levels to $13.2 over the next 12 months.

1. Covenant Transportation Group ( CVTI) provides Asset-Based Truckload (Truckload) and Brokerage Services, or Covenant Transport Solutions (Solutions). The company serves truckload customers such as manufacturers and retailers, and transportation companies.

Covenant recently reported its fourth quarter and full-year 2010 financial results. Net income came in at $0.7 million, or 5 cents per share, from a net loss of $2.7 million, or 19 cents per share, in the same quarter a year ago. Revenue for the quarter soared 3.9% to $163.9 million. For 2010, Covenant reported net income of $3.3 million, compared to a net loss of $25 million in 2009, while revenue escalated 10.4%.

Analysts polled by Bloomberg foresee 2011 net income surging to $7.35 million. A transportation analyst in his 2011 freight outlook believes that investors will find greater resiliency in transport companies that lease vehicles for businesses that ship goods, demonstrating cost flexibility. A BB&T Capital Markets analyst favors asset-based companies, as they not only benefit from rate increases but also higher volumes.

Seventy-five percent of analysts covering the stock rate it a buy, while the remaining recommend a hold. There are no sell ratings on the stock. Data from Bloomberg has analysts forecasting a gain of 35.1% from current levels to $12 over the next 12 months.

>To see these stocks in action, visit the 10 Transport Stocks With Upside portfolio on Stockpickr.

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