03.24.2008
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| Truckers Rally As Statistics Hint Of Upturn
Truckers Rally As Statistics Hint Of Upturn 3/24/08 Quote:
A week after lousy weather and record fuel prices urged Werner Enterprises (NASDAQ:WERN) WERN to lower its first-quarter earnings outlook, the trucking industry is on the move.
The group posted a nearly 4% gain Monday. It wasn't the best performance by an industry group. But it launched truckers into what could be a fourth straight week of gains.
A few stocks -- JB Hunt JBHT, Landstar LSTR and Old Dominion Freight Lines ODFL -- in the group broke out Monday. The companies' fundamentals, however, are soft.
Truckers tend to turn up early in economic cycles as retailers and industries hustle to replenish inventories and restock shelves.
Analysts have been upgrading and downgrading truckers based on various outlooks on the U.S. economy.
In mid-February, Goldman Sachs (NYSE:GS) raised truckers to attractive from cautious. That upgrade came as the American Trucking Association's tonnage index jumped 5.3% in January after falling in 14 of 16 previous months.
There is a good reason to be wary of truckers. Werner's warning, continued harsh winter weather and rising diesel prices suggest difficulties before an upturn.
In addition, the Cass Freight index, a broader measure of shipping activity, posted a 3.6% annual decline in January.
Wednesday's release of the ATA's February index numbers could move trucking stocks.
ATA economist Tavio Headley said tonnage reports for February appear mixed and inventories remain tight.
So when the economy does turn, trucking demand may see a fairly immediate impact.
http://money.cnn.com/news/newsfeeds/...1-23988727.htm | |
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