3 Stocks Driving The Transportation Industry Higher

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 3.18 points (0.0%) at 16,567 as of Tuesday, Aug. 12, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,103 issues advancing vs. 1,863 declining with 180 unchanged.

The Transportation industry as a whole closed the day down 0.4% versus the S&P 500, which was down 0.2%. Top gainers within the Transportation industry included Box Ships ( TEU), up 2.3%, Patriot Transportation Holdings ( PATR), up 3.0%, Covenant Transportation Group ( CVTI), up 3.3%, Eagle Bulk Shipping ( EGLE), up 6.0% and Diana Containerships ( DCIX), up 4.1%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Covenant Transportation Group ( CVTI) is one of the companies that pushed the Transportation industry higher today. Covenant Transportation Group was up $0.39 (3.3%) to $12.05 on heavy volume. Throughout the day, 67,065 shares of Covenant Transportation Group exchanged hands as compared to its average daily volume of 39,100 shares. The stock ranged in a price between $11.53-$12.13 after having opened the day at $11.55 as compared to the previous trading day's close of $11.66.

Covenant Transportation Group, Inc., together with its subsidiaries, offers truckload transportation and brokerage services in the continental United States. Its Asset-Based Truckload Services segment provides long haul, dedicated, temperature-controlled, and regional solo-driver services. Covenant Transportation Group has a market cap of $146.1 million and is part of the services sector. Shares are up 42.0% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Covenant Transportation Group a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Covenant Transportation Group as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from TheStreet Ratings analysis on CVTI go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 99.9% when compared to the same quarter one year prior, rising from $1.89 million to $3.78 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.9%. Since the same quarter one year prior, revenues slightly increased by 0.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 92.30% and other important driving factors, this stock has surged by 80.44% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • COVENANT TRANSPORTATION GRP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COVENANT TRANSPORTATION GRP reported lower earnings of $0.35 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($0.61 versus $0.35).
  • The gross profit margin for COVENANT TRANSPORTATION GRP is currently extremely low, coming in at 11.72%. Regardless of CVTI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CVTI's net profit margin of 2.17% is significantly lower than the industry average.

You can view the full analysis from the report here: Covenant Transportation Group Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

At the close, Patriot Transportation Holdings ( PATR) was up $1.08 (3.0%) to $36.82 on average volume. Throughout the day, 12,059 shares of Patriot Transportation Holdings exchanged hands as compared to its average daily volume of 11,300 shares. The stock ranged in a price between $34.34-$36.82 after having opened the day at $35.37 as compared to the previous trading day's close of $35.74.

Patriot Transportation Holding, Inc., through its subsidiaries, is engaged in the transportation and real estate businesses in the United States. It operates in three segments: Transportation, Mining Royalty Land, and Developed Property Rentals. Patriot Transportation Holdings has a market cap of $340.6 million and is part of the services sector. Shares are down 13.9% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Patriot Transportation Holdings a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates Patriot Transportation Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on PATR go as follows:

  • PATR's revenue growth has slightly outpaced the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 17.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • PATR's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Road & Rail industry and the overall market, PATRIOT TRANSN HOLDING INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • PATRIOT TRANSN HOLDING INC's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PATRIOT TRANSN HOLDING INC increased its bottom line by earning $1.60 versus $0.81 in the prior year. For the next year, the market is expecting a contraction of 28.1% in earnings ($1.15 versus $1.60).

You can view the full analysis from the report here: Patriot Transportation Holdings Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Box Ships ( TEU) was another company that pushed the Transportation industry higher today. Box Ships was up $0.03 (2.3%) to $1.31 on light volume. Throughout the day, 72,156 shares of Box Ships exchanged hands as compared to its average daily volume of 129,600 shares. The stock ranged in a price between $1.28-$1.32 after having opened the day at $1.29 as compared to the previous trading day's close of $1.28.

Box Ships Inc., a shipping company, is engaged in the seaborne transportation of containers worldwide. As of December 31, 2013, it had a fleet of 9 containerships with a total capacity of approximately 43,925 twenty-foot equivalent units. Box Ships has a market cap of $32.4 million and is part of the services sector. Shares are down 61.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Box Ships a buy, 2 analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Box Ships as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on TEU go as follows:

  • 47.38% is the gross profit margin for BOX SHIPS INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, TEU's net profit margin of -10.70% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Marine industry. The net income has significantly decreased by 137.8% when compared to the same quarter one year ago, falling from $4.02 million to -$1.52 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Marine industry and the overall market on the basis of return on equity, BOX SHIPS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

You can view the full analysis from the report here: Box Ships Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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