However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.
There are 121 stocks listed under "transportation" in the CAPS' screener, but more than a handful of them carry well-respected four- and five-star ratings. Those accolades mean our 170,000 CAPS members are confident that these stocks will beat the market in the months ahead, but let's see what members are saying about the ones below:
|
Company
|
CAPS Rating
(out of 5)
|
Recent Price
|
52-Week Price Change
|
Est. 5-Year Growth Rate
|
| CSX (NYSE: CSX ) |
**** |
$71.02 |
65.7% |
16% |
| Genco Shipping (NYSE: GNK ) |
***** |
$12.26 |
(36.0%) |
5% |
| Navios Maritime (NYSE: NM ) |
***** |
$5.04 |
(19.5%) |
24% |
Source: Motley Fool CAPS; Yahoo! Finance.
The markets may be feeling better about the economy after a few reports have offset much of the drumbeat of negativism we've seen, but with the S&P 500 up almost 19% over last year, CAPS transportation stocks have done even better. The average stock is up more than 30% from the year-ago period.
Helping the sector's performance was Global Ship Lease (NYSE: GSL ) , which quadrupled in value in the past year, and Air Transport Services Group, which soared 230% over the same period.
On the other end, shippers like General Maritime fell 60% over the past 12 months, so let's take a closer look at why investors think some of these other companies won't be jumping from the frying pan into the fire now that the markets are roiled again.
Some spring in its step
A booming container ship market has bolstered the operations of leader Global Ship Lease and attracted other shippers, like Diana Shipping (Nasdaq: DSX ) , that are contending with the collapse of the dry-bulk market. So long as the economy continues to expand, there should be enough business for everyone, considering GSL was operating at 100% utilization rates.
Unfortunately, the glut in dry-shipping vessels is decimating the industry and Navios Maritime was affected by the bankruptcy declaration of a Korean shipper, which foundered in the declining market. The worst-hit was Eagle Bulk Shipping (Nasdaq: EGLE ) , which leased more than a quarter of all its vessels to Korea Line, but Navios realizes an estimated 15% of its revenues from the shipper.
While Genco Shipping was not exposed to the Korean crisis, it is still suffering from the industry malaise, where rates for capesize ships are plummeting. A year ago, Genco took possession of nine capesize vessels and chartered one for $36,000 a day. The others were running between $45,000 and $65,000 per day. Today, however, the average fee has fallen to less than $8,700 a day. Ouch! It helps explain why Excel Maritime is also down more than 20% over the past 12 months.
Analysts believe Navios was actually protected against circumstances such as the Korea Line matter and CAPS member llgrout sees the shipper in fine financial health:
What is not to like about his one? Earnings up - check, cash flow - check. Sales increasing - check. company growing - check. P/E good - check. debt load decent - check. Management - check. All systems seem to be go, although I would like to see less shares outstanding, risk is moderate at best.
CAPS member billybob4148 sees Genco ultimately benefitting from the economic recovery that's helping Global Ship Lease along:
This shipping company appears to be well positioned for the economic rebound. Lots of debt, sure, but lots of capacity too for making money. Seems like the stock is just getting hammered. And this seems like a great entry point for owning the stock for a longer time.
Not running off the rails
There are indications the broader economy is getting on the road to recovery. Railroad magnate CSX reported normalizing demand for rail-transported freight, though both it and Union Pacific said automotive freight is weak.
That brightening picture coincides with the American Trucking Association's saying that truck tonnage volumes reached their highest levels in December since the middle of 2008. Even troubled YRC Worldwide (Nasdaq: YRCW ) is benefiting from the news, with intermodal carriers like CSX likely to enjoy the greater growth.
In CAPS, 96% of those rating CSX believe it will outperform the broad market averages. Let us know on the CSX CAPS page if you agree.
The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.
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