With the economy improving and stocks like Amazon.com, Inc. (NASDAQ: AMZN) up over 45% so far in 2018 alone, a lot of goods are being moved. Transportation of these goods is often seen as a core part of the overall economy and even a “litmus test” on the overall state of the economic health. A healthy transportation sector means a greater flow of goods, which comes in response to rising demand from consumers and signals overall economic growth. Here are five stocks that may benefit from the increasingly vibrant “delivery to your door” economy.
USA Truck, Inc. (NASDAQ: USAK) is a trucking company based out of Van Buren, AK. USA Truck has beaten consensus earnings estimates the past three quarters, and has grown earnings 37% in 2018.
USA Truck sports a forward P/E of only 9.93. Operating a fleet of almost 1,700 trucks at the end of 2017, the company combines long-haul trucking with a logistics segment.
USAK has pulled back to support at $22 after gapping out of a rising base earlier in the year, and looks ready to start another run.
Navios Maritime Holdings, Inc. (NYSE: NM) has gone through a rough patch in 2018, but has just been upgraded by both Zack’s Investment Research and ValuEngine. Navios is a shipping company based out of Monte Carlo, Monaco.
The company has been basing between $.75 and $.90 the past few months, but looks poised to break away from the $.90 level. With cash of $.96 a share and a book value of $3.87 per share, it appears that Navios Maritime Holdings has fallen to a level that definitely deserves attention.
Let’s move from the ocean to the rails. FreightCar America, Inc. (NASDAQ: RAIL) headquartered in the Windy City, makes and sells railcars. Though earnings have been negative the past 3 quarters, last quarter FreightCar America beat consensus estimates handily.
The stock has performed well the past two months and has pulled back slightly from recent highs just above $17.50, which is also resistance. A break above this level could signal room to run.
Another beaten down transport that has gained it’s footing and looks ready to rise further is Roadrunner Transportation Systems, Inc. (NYSE: RRTS).
The stock has dropped 78% since late last year. However, now that the stock is at this level it’s forward price-to-earnings (P/E) is only 2.7 and, its earnings-per-share growth this year is currently 151%.
With a price-to-sales (P/S) of only .04 and a book value of $3.48 per share, the stock has become a value play in a what should be a strong sector.
Finally, let’s expand our notion of the transportation sector slightly to include UFP Technologies, Inc. (NASDAQ: UFPT). UFP designs and makes a large array of packing and shipping materials for a range of industries.
UFP Technologies has a projected forward P/E of 12.22, with projected earnings growth next year over 35%. This is not surprising given the booming growth in consumer purchases online.
UFP Technologies stock has risen strongly this year and in the past month has retraced back to support above $30. This container company is ready to ride the rising tide of a strengthening economy.
These five micro-cap transportation (and packaging) stocks are in a great position to address the wave of consumer spending that has lifted stocks like Amazon. Each of their shares has the potential to appreciate nicely over the coming year.
Disclaimer: The author and Spotlight Growth has no positions in any of the stocks mentioned in this article. Nor does either party currently have any relationship, or any other conflicts of interest, with any of the companies mentioned in this article. This content is meant for informational and entertainment purposes only and should not be meant as a recommendation to buy or sell any securities. Please visit a licensed financial representative to determine what investments are right for you.
Article By: Steven Adams