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.
Airlines have been punished lately, trailing not only the S&P 500, but also their industrials peers. News that Delta would not meet already weak passenger yield expectations underscores that analysts still remain overly optimistic.…
Transportation stocks are weak, reflecting profit warnings in both the trucking and rail industries. Air freight equities have been slightly more resilient, but the outlook for profits remains bearish. Global revenue ton miles are…
Airline stocks have been walloped of late, as the downside of an industry with high operating leverage is beginning to rear its head. The past few years of low oil prices and decent demand encouraged a large investment in capacity,…
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…
Air freight stocks have been unable to gather speed during the most recent bout of overall market strength and bid under risky assets, reflecting long-term pressure on valuation multiples. Persistently high business inventories mean…
Airline stocks have enjoyed some modest relief in recent weeks, but we expect this resilience to fully reverse. The main issue is overcapacity. Discretionary spending is under pressure, based on the message from global manufacturing…
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…