3 Stocks Pushing The Transportation Industry Lower

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.

The Transportation industry as a whole closed the day down 0.1% versus the S&P 500, which was down 0.2%. Laggards within the Transportation industry included Air T ( AIRT), down 1.5%, FreeSeas ( FREE), down 13.0%, ModusLink Global Solutions ( MLNK), down 3.1%, USA Truck ( USAK), down 3.0% and Frontline ( FRO), down 12.9%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

USA Truck ( USAK) is one of the companies that pushed the Transportation industry lower today. USA Truck was down $0.53 (3.0%) to $17.36 on average volume. Throughout the day, 65,727 shares of USA Truck exchanged hands as compared to its average daily volume of 61,300 shares. The stock ranged in price between $17.21-$18.50 after having opened the day at $17.85 as compared to the previous trading day's close of $17.89.

USA Truck, Inc. operates as a truckload carrier that provides general commodities transportation services in the United States, Mexico, and Canada. The company transports full dry van trailer loads of freight from origin to destination. USA Truck has a market cap of $197.7 million and is part of the services sector. Shares are up 33.7% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate USA Truck a buy, 1 analyst rates it a sell, and none rate it a hold.

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TheStreet Ratings rates USA Truck as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on USAK go as follows:

  • USAK's revenue growth has slightly outpaced the industry average of 8.8%. Since the same quarter one year prior, revenues slightly increased by 9.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 150.00% and other important driving factors, this stock has surged by 233.68% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Even though the current debt-to-equity ratio is 1.27, it is still below the industry average, suggesting that this level of debt is acceptable within the Road & Rail industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.05 is sturdy.
  • The gross profit margin for USA TRUCK INC is currently extremely low, coming in at 9.93%. Regardless of USAK's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, USAK's net profit margin of 0.47% is significantly lower than the industry average.
  • Net operating cash flow has decreased to $12.77 million or 18.48% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

You can view the full analysis from the report here: USA Truck Ratings Report

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At the close, FreeSeas ( FREE) was down $0.07 (13.0%) to $0.47 on heavy volume. Throughout the day, 2,879,024 shares of FreeSeas exchanged hands as compared to its average daily volume of 1,058,100 shares. The stock ranged in price between $0.46-$0.58 after having opened the day at $0.58 as compared to the previous trading day's close of $0.54.

FreeSeas Inc., through its subsidiaries, provides drybulk shipping services. Its vessels carry various drybulk commodities, such as iron ore, grain, and coal, as well as bauxite, phosphate, fertilizers, steel products, cement, sugar, and rice. FreeSeas has a market cap of $20.4 million and is part of the services sector. Shares are down 76.0% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates FreeSeas as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from TheStreet Ratings analysis on FREE go as follows:

  • FREE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 33.34%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • FREE's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.11 is very low and demonstrates very weak liquidity.
  • The revenue fell significantly faster than the industry average of 9.5%. Since the same quarter one year prior, revenues fell by 45.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Compared to other companies in the Marine industry and the overall market, FREESEAS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • FREESEAS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, FREESEAS INC continued to lose money by earning -$29.37 versus -$220.50 in the prior year.

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

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Air T ( AIRT) was another company that pushed the Transportation industry lower today. Air T was down $0.18 (1.5%) to $11.70 on light volume. Throughout the day, 5,765 shares of Air T exchanged hands as compared to its average daily volume of 13,300 shares. The stock ranged in price between $11.54-$11.93 after having opened the day at $11.83 as compared to the previous trading day's close of $11.88.

Air T, Inc., through its subsidiaries, provides overnight air cargo, ground equipment sales, and ground support services in the United States and internationally. Air T has a market cap of $27.7 million and is part of the services sector. Shares are down 0.8% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Air T 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, reasonable valuation levels, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

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Highlights from TheStreet Ratings analysis on AIRT go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 2.3%. 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.
  • AIRT's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AIRT has a quick ratio of 1.83, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 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 Air Freight & Logistics industry and the overall market, AIR T INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here: Air T Ratings Report

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