Experienced Research Analyst and Managing Director of Raymond James Financial Arthur W. Hatfield: Best Transportation Sector Stock Picks for Q4 2012

Wall Street Transcript

67 WALL STREET, New York - October 2, 2012 - The Wall Street Transcript has just published its Transportation and Logistics Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: FMCSA CSA Regulations - Regulatory Issues in the Trucking Industry - Trucking Pricing & Capacity Dynamics - Retail and Industrial Transportation Demand - Truckload, LTL, Parcel, Rail and Intermodal - Capacity Constraints Result in Pricing Power

Companies include: FedEx Corporation (FDX), United Parcel Service, Inc. (UPS), Ryder System, Inc. (R), GATX Corp. (GMT), Saia, Inc. (SAIA), American Railcar Industries (ARII), Greenbrier Companies (GBX), YRC Worldwide Inc. (YRCW) and many others.

In the following excerpt from the Transportation and Logistics Report, an experienced analyst discusses his outlook for the sector for investors:

TWST: What were the highlights from the most recent quarterly earnings calls?

Mr. Hatfield: I think we saw some nice earnings surprises with good companies. I can't say that anything jumped out from a sector perspective. You had some good reports within sectors, and you had some bad ones.

Within the trucking space, we had some pretty decent reports from some companies that have been able to show a good focus on cost and that have been able to grow their business in unique ways, either through real strong pricing discipline or through some small acquisitions. Saia (SAIA) in LTL had a very good second-quarter result, and that was driven by a very strong pricing discipline and good cost control.

Celadon (CGI), within the truckload space, was able to show a little bit of growth because of some acquisitions they had made, and also a good job on the cost and pricing front gave a good number.

Within the equipment side, American Railcar (ARII) put up a very strong number, and that was really a result of discipline on the orders that they took into their backlog and producing on those orders with good cost controls.

TWST: Are those your top picks right now? Are there others?

Mr. Hatfield: Those names that I mentioned stick out. Our current favorite idea is Greenbrier (GBX). We like the fundamentals of the railcar supply space, but one of the things is that Greenbrier has lagged the group. There are some concerns about their ability to produce numbers to the level of some of their peers, and I think to a little bit of a degree that's justified, but I think, as a whole, the industry has performed well, and I think that they should be able to continue to perform well. As such, and the fact that it's lagged, I think it will play a little bit of a catchup going forward. So that's our current favorite idea.

But those names I mentioned earlier - American Railcar, Celadon (CGI), Saia - stick out as names that we like a lot and that we think have some good upside if they can continue to perform on the earnings line.

TWST: Are there any stocks you're cautious about right now?

For more from this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers, and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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