The Zacks Analyst Blog Highlights: UPS, JB Hunt, Old Dominion, Arkansas Best and Covenant Transportation

Zacks


For Immediate Release

Chicago, IL – July 16, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include UPS (UPS-Free Report), JB Hunt (JBHT-Free Report), Old Dominion (ODFL-Free Report), Arkansas Best (ABFS-Free Report) and Covenant Transportation (CVTI-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday’s Analyst Blog:

Are Trucker Profits Signaling a Market U-Turn?

Friday’s profit warning from UPS (UPS-Free Report) and today’s earnings shortfall from JB Hunt (JBHT-Free Report) put the transport sector in the spotlight. The results may cause a review of the profit outlook in the freight/transportation sector, and the market to think about making a U-turn.   UPS noted its profits had been hurt by customers trading down to lower cost shipment methods, slower industrial production, and overcapacity in the airfreight market.    The slowdown in international business is not surprising given soft export growth numbers from China and India, and continued sluggish economic growth in Europe.  JB Hunt reported that its truck segment saw a 20% drop in revenues due to a smaller fleet and lower utilization.   The profit results prompt an examination of the Cass Shipping index, which monitors freight shipment volume, for insight into the transportation industry’s health.

Shipment and economic activity are slow:

The Cass Shipment index displayed strength in Q2 relative to Q1 averaging 1.12 compared to 1.08, but the three month average of the year over year change in the Index was -1.0% in June compared to +0.7% at the end of March.  Growth in shipment activity has been relatively flat since the summer of 2011 and does not appear to have strong forward momentum.  Despite the economic expansion, the Federal Reserves’ index of industrial production has not exceeded the peak prior to the Great Recession in late 2007.  Further, the manufacturing index has been flat to lower since February 2013, showing a pause in growth.  The pace of economic activity has not been helpful to the freight sector and it is not surprising that UPS and JB Hunt disappointed investors with their profit results.  

The market is optimistic on earnings:

Old Dominion (ODFL-Free Report), Arkansas Best (ABFS-Free Report) and Covenant Transportation (CVTI-Free Report) have a Zacks Rank #2 (Buy).  None of the four companies had seen their EPS estimates reduced in the past 30 days.  The agreement among analysts leans constructive for the profit outlook and runs against the recent profit warning from UPS and the short fall from JB Hunt.  Arkansas Best has seen the strongest movement in EPS forecasts.   The enthusiasm toward the sector seems misplaced based on the most recent data points.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

Get the full Report on UPS - FREE

Get the full Report on JBHT - FREE

Get the full Report on ODFL - FREE

Get the full Report on ABFS - FREE

Get the full Report on CVTI - FREE

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
 

Read the analyst report on UPS

Read the analyst report on JBHT

Read the analyst report on ODFL

Read the analyst report on ABFS

Read the analyst report on CVTI

Zacks Investment Research



More From Zacks.com
View Comments