Highlights Portfolio Strategy Pricing power has improved across a number of industries, with the exception of technology, a necessary development to sustain an overall profit recovery. The S&P railroads index has surged to the…

The S&P railroad index has vaulted higher, along with many other industrial groups, but it may be starting to overshoot fundamental improvement. Technical conditions are becoming overbought. The 52-week rate of change is nearing…

The transport group is a positive exception to our otherwise downbeat view on the relative performance prospects of the overall industrials sector. We expect consumption to continue outpacing capital spending, because corporate sector…

Special Report

Transport stocks have discounted a recession, trading below trough bear market relative valuations. That is too cheap given signs of stabilization in global export growth.

Investors looking for a lower risk vehicle to participate in broad equity market strength than from chasing momentum driven areas with dubious fundamentals need look no further than the S&P rail index. Expectations have been crushed…

It is dangerous to equate recent equity strength with economic vitality, as history shows that liquidity-fueled equity advances favor non-cyclicals over deep cyclicals. Take profits in gold, buy rails and sell industrial machinery.

The previous Insight showed that rails are working hard to reduce cost structures. However, rail profits are still tightly linked with overall freight trends. The decline in total railcar shipment growth warns that rail earnings…

The relief rally in rail stocks has stalled at key resistance levels, but good value and extreme cost cutting efforts make it tempting to buy into any short-term weakness. Would that be a sound strategy? Top-line growth is lagging far…

The S&P rail index has bounced off its lows but continues to lack profit support to extend the recovery attempt. Total railcar shipments remain under pressure, which signals ongoing weak utilization rates and low odds of a reversal…

We recommended buying into rail weakness in November, on the view that a poor earnings outlook was already discounted and that shipment and pricing power trends would improve as 2016 progressed, allowing cost cutting efforts to shine…