|By PR Newswire||
|January 17, 2014 09:30 AM EST||
CHICAGO, Jan. 17, 2014 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: Southwest Airlines Co. (NYSE:LUV-Free Report), Norfolk Southern Corporation (NYSE:NSC-Free Report) and Canadian Pacific Railway Limited (NYSE:CP-Free Report).
Wheels Roll in Transportation, 3 Stocks Set to Beat
In the wake of the World Bank's revised outlook on the global economy, we are hopeful that the fourth quarter results of the U.S. stocks will bring the mojo back for investors, who have otherwise endured significant volatilities throughout 2013. Further, encouraging U.S. retail data that uplifted the greenback leaves little scope for any pessimism going forward.
The transportation sector too will benefit from the broader optimism and we look forward to outperformance by some of its stocks. Not only does the current momentum in the macro economy work in favour of these stocks, the industry fundamentals also continue to improve. From a modest beginning to a strong third quarter, these stocks have proved their mettle, driving us to crown them as our top picks.
Why Transportation is an Attractive Bet?
While fourth quarter results are underway, we are yet to see the major actions in Transportation with only 9.1% of the sector participants having reported. Overall, the sector is expected to register a double-digit (17%) earnings improvement, stemming from steady growth in airlines and railroad stocks.
According to the International Air Transport Association (IATA), the 2014 outlook on the global airline industry looks promising with profitability estimated at $16.4 billion on a passenger count of 3.30 billion. Net profit margin is also expected to grow 2.2%. Economic recovery and the resultant surge in air travel demand, disciplined capacity and many new and enhanced ancillary revenue opportunities would contribute to growth this year.
Railroads' operating performance too seems to have bounced back amid coal woes thanks to operational efficiency, increased market demand for intermodal services as well as shipment of key commodities like petroleum products, automotives and grain crop.
In such a scenario, it might be a good idea to zero-in on a handful of transportation stocks that are poised to beat earnings estimates this quarter. An earnings surprise should help these stocks outperform in the near term.
How to Find a Top Pick
Stock diversity in the transportation arena could muddle up your picking power. An easy way to narrow down the list for your portfolio is to take a look at stocks with solid Zacks Rank and favorable Zacks Earnings ESP.
Earnings ESP is our proprietary methodology for determining stocks having the best chance to surprise with their next earnings announcement. The earnings ESP shows the percentage difference between the Most Accurate estimate and the Zacks Consensus.
The combination of a positive to neutral Zacks Rank – Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) – and a positive earnings ESP, is usually a harbinger of earnings beat.
For investors seeking to benefit by applying this strategy, we have chosen three transportation stocks that we believe will exhibit significant upward potential following their upcoming earnings announcement.
Southwest Airlines Co. (NYSE:LUV-Free Report): Dallas-based Southwest Airlines provides low cost passenger air transportation services in the U.S. It primarily provides short-haul, high frequency, point-to-point airline services covering many secondary or downtown airports such as Dallas Love Field, Houston Hobby, Chicago Midway, Baltimore/Washington International, Burbank, Manchester, Oakland and San Jose. In May 2011, Southwest completed the acquisition of AirTran Holdings, which now operates as a wholly owned subsidiary under the name AirTran Airways. As of Sep 30, 2013, Southwest operated 696 Boeing aircraft and served 97 destinations along with AirTran.
The Zacks Consensus Estimates for fourth-quarter is 28 cents, representing robust growth over the year-ago quarter. The company registered an average earnings surprise of 41.40% over the trailing 12 months.
The company presently carries a Zacks Rank #1 and has an earnings ESP of +7.14%. Southwest Airlines is set to report its fourth quarter results on Jan 23, before the opening bell.
Norfolk Southern Corporation (NYSE:NSC-Free Report): Headquartered in Norfolk, Virginia, Norfolk Southern Corp. owns a major freight railroad Norfolk Southern Railway, which also represents a Class I railroad in the U.S. The company operates over 20,000 route miles across 22 Eastern states in the U.S. The company offers rail transportation of commodities like coal and other raw materials, intermediate products and finished goods. It also offers comprehensive logistics and most extensive intermodal services on the Eastern part of the U.S. and caters to overseas freight through several Atlantic and Gulf Coast ports.
The Zacks Consensus Estimate for the fourth quarter is $1.50. This represents a year-over-year improvement of 15.7%. The company delivered average earnings surprise of 5.01% over the trailing 12 months.
Norfolk Southern has an earnings ESP of +0.67% and retains a Zacks Rank #3 (Hold). The company is slated to release its fourth quarter results on Jan 22.
Canadian Pacific Railway Limited (NYSE:CP-Free Report): Based in Calagary, Alberta, Canadian Pacific is another Class I railroad that provides rail freight transportation services to the principal business centers of Canada from Montreal to Vancouver, as well as the U.S. covering major cities like Chicago, New York City, Detroit and Minneapolis. The company has extended its network through collaborations with other Class I railways in North America, which allows it to provide services and access to markets across North America beyond its own rail network.
Currently, the Zacks Consensus Estimate for fourth-quarter is $1.87 with growth expectation of 46.3% from the prior-year quarter. The company boasts an average earnings surprise of 1.49% over the trailing 12 months.
Canadian Pacific currently holds a Zacks Rank #3 and has an earnings ESP of +1.60%. The carrier is slated to report its fourth quarter financial results on Jan 29, before market opens.
Conscious efforts to turn around are evident in the economy at large. The transportation sector is also riding on the upturn with palpable improvements in the fundamentals of airline and railroad stocks.
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! Click here for your free subscription to Profit from the Pros.
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook: http://www.facebook.com/ZacksInvestmentResearch
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.
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.
SOURCE Zacks Investment Research, Inc.
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
May. 2, 2016 05:15 PM EDT Reads: 959
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
May. 2, 2016 05:00 PM EDT Reads: 1,070
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time. In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...
May. 2, 2016 04:00 PM EDT Reads: 885
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
May. 2, 2016 03:45 PM EDT Reads: 1,325
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
May. 2, 2016 03:30 PM EDT Reads: 1,045
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
May. 2, 2016 03:00 PM EDT Reads: 288
SYS-CON Events announced today that Ericsson has been named “Gold Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. Ericsson is a world leader in the rapidly changing environment of communications technology – providing equipment, software and services to enable transformation through mobility. Some 40 percent of global mobile traffic runs through networks we have supplied. More than 1 billion subscribers around the world re...
May. 2, 2016 02:45 PM EDT Reads: 1,058
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
May. 2, 2016 02:00 PM EDT Reads: 923
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
May. 2, 2016 12:30 PM EDT Reads: 1,267
You deployed your app with the Bluemix PaaS and it's gaining some serious traction, so it's time to make some tweaks. Did you design your application in a way that it can scale in the cloud? Were you even thinking about the cloud when you built the app? If not, chances are your app is going to break. Check out this webcast to learn various techniques for designing applications that will scale successfully in Bluemix, for the confidence you need to take your apps to the next level and beyond.
May. 2, 2016 12:00 PM EDT Reads: 1,541
There is an ever-growing explosion of new devices that are connected to the Internet using “cloud” solutions. This rapid growth is creating a massive new demand for efficient access to data. And it’s not just about connecting to that data anymore. This new demand is bringing new issues and challenges and it is important for companies to scale for the coming growth. And with that scaling comes the need for greater security, gathering and data analysis, storage, connectivity and, of course, the...
May. 2, 2016 11:45 AM EDT Reads: 934
Peak 10, Inc., has announced the implementation of IT service management, a business process alignment initiative based on the widely adopted Information Technology Infrastructure Library (ITIL) framework. The implementation of IT service management enhances Peak 10’s current service-minded approach to IT delivery by propelling the company to deliver higher levels of personalized and prompt service. The majority of Peak 10’s operations employees have been trained and certified in the ITIL frame...
May. 2, 2016 11:30 AM EDT Reads: 1,023
SYS-CON Events announced today that Fusion, a leading provider of cloud services, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Fusion, a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry's single source for the cloud. Fusion's advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including cloud...
May. 2, 2016 10:00 AM EDT Reads: 2,621
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
May. 2, 2016 10:00 AM EDT Reads: 1,015
Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes...
May. 2, 2016 09:15 AM EDT Reads: 857