Logistics and Air Travel Weekly: June 26–30, 2017
Transportation ETFs performed well last week
Transportation ETFs rose in the last week of June 2017. The SPDR S&P Transportation ETF (XTN) rose the most with a 2.6% gain. The iShares Transportation Average ETF (IYT) and the First Trust Nasdaq Transportation ETF (FTXR) rose 1.8% and 1.1%, respectively.
FTXR has returned 7.7%, while IYT and XTN have returned 6.3% and 3.0% on a YTD (year-to-date) basis. Airlines account for 31.6%, railroads account for 14.0%, and trucking accounts for 3.5% of FTXR’s portfolio holdings.
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J.B. Hunt Transport Services (JBHT) and Old Dominion Freight Line (ODFL) account for ~2.7% and ~2.8%, respectively, of XTN’s total portfolio holdings. Allegiant Travel (ALGT) accounts for ~2.7% and Alaska Air Group (ALK) accounts for ~2.8% of XTN’s portfolio.
The broader market, tracked by the SPDR S&P 500 ETF (SPY), fell ~0.5% during the week ending June 30. Improvements in market indexes are correlated to improvements in various economic indicators. To learn more about how economic indicators impact index performance, read How Improved US Consumer Confidence Will Affect the S&P 500 Index.
Top gainers in the logistics and air travel sector
The last week of June 2017 witnessed a fairly good stock performance from trucking, railroad, air delivery, and freight services companies.
According to the above table, logistics companies had higher stock prices.
Schneider National (SNDR) topped the list with a stock price gain of 6.5%. It was the top gainer in the logistics and air travel sector. Its stock started trading on the New York Stock Exchange on April 6, 2017. Following the initial public offering, Schneider National stock has risen 21.3% on a YTD basis. Schneider National accounts for ~0.4% of the First Trust US Equity Opportunities ETF’s (FPX) total portfolio holdings.
Schneider National declared a quarterly cash dividend of $0.05 per share on June 20, 2017. The dividend is expected to be paid on July 11, 2017, to shareholders of record as of June 30, 2017.
Schneider National stock rose 0.7% on June 27, 2017, following James R. Giertz election to the company’s board of directors and an ex-dividend date of June 28.
The next top mover in the sector was J.B. Hunt Transport Services. Its stock price rose 5.3% in the last week of June. Trinity Industries (TRN), XPO Logistics (XPO), and CSX (CSX) rose 4.6%, 4.1%, and 3.6%, respectively.
Considering a fall of 3.1% during the week ending June 23 and a fall of 4.0% in the past six months, J.B. Hunt’s recovery is impressive.
According to data compiled by Thomson Reuters on June 27, 2017, 11 out of 22 analysts favored a “buy” on J.B. Hunt. The remaining 50% of the analysts recommended a “hold.” J.B. Hunt’s ratings might have caused investors to react positively to the stock. Strong industry fundamentals will likely impact J.B. Hunt, which operates in all verticals of the road transport market.
Trinity Industries rose 2.1% on a YTD basis. A rise in the stock price for the week of June 23–30, 2017, might have been prompted by market sentiments. According to Accern’s sentiment analysis data, press coverage for Trinity Industries has been fairly positive. It might have led to the 4.6% rise in the stock price last week.
To read more about market sentiment in the past week, read Weekly Economic Indicators: Sales, Sentiments, and Confidence.
Top losers in the logistics and air travel sector
During the week ending June 30, 2017, companies in the air travel sector saw the biggest loss. Low-cost carrier Allegiant Travel (ALGT) witnessed a 4.3% fall in its stock price. Allegiant stock has been on a downward trend since it peaked at $232.9 on August 14, 2015. The highest stock price reported in 2017 was $177.5 in January. According to Wall Street analysts, Allegiant’s margins and earnings per share have fallen in the past year. Currently, Allegiant is in a slump—its net profit has fallen each quarter. The company posted a net profit of $41.3 million in 4Q16—down 27.2% from $56.7 million in 4Q15.
On June 20, 2017, Allegiant announced 28 new routes and three new destinations in anticipation of boosting its growth. Be sure to visit Market Realist’s Airlines page for more updates.
Alaska Air Group (ALK) fell 2.0% in the week ending June 30, 2017. It was the top mover with a gain of 3.3% in its stock price on June 19–23, 2017. However, Alaska Air Group fell from the top mover to the bottom mover. The stock hasn’t been performing since April 2017. Horizon Air, a subsidiary of Alaska Air Group, is reportedly facing a pilot shortage due to attrition. A few flights have been canceled due to the shortage, which might have caused the stock price to fall.
For the S&P 500’s top gainers and losers, read Staples Was the S&P 500’s Top Gainer on June 28.
American Railroads’ weekly traffic report
On June 28, 2017, the AAR (Association of American Railroads) released its North America rail traffic data for the week ending June 24, 2017. Total US weekly rail traffic rose 3.6% (544,694 carloads and intermodal units)—compared to the same week in 2016. Canadian rail traffic rose compared to the same week in 2016, while Mexican rail traffic reported a decline.
For more details and figures, read AAR Reports Weekly Rail Traffic for the Week Ending June 24, 2017.
Cass Freight Index report
Cass Information Systems released its Cass Freight Index report for May on June 29, 2017. The shipment for May rose 7.1%. Freight expenditures have risen 7.4% on a year-over-year basis. The report also noted positive growth for freight shipments and expenditures.
To learn more, visit View the May Report.