How Bond Buybacks Add Value
As of June 30, 11 fallen angel companies had issued tender offers YTD, boosting their bond prices by 5% on average.
Transportation & Logistics
Market Realist has the latest news on transportation and logistics, from airlines to supply chain solutions.
FedEx Tax Bill: CEO Challenges New York Times’ Claims
FedEx (FDX) CEO Frederick Smith slammed the New York Times for its story about FDX’s tax bill. In a statement, Smith challenged the publisher to a debate.
Why Have Some Analysts Become Less Positive on American Airlines?
Out of the 14 analysts tracking American Airlines (AAL), 50% have a “buy” recommendation on the stock as compared to the 71.4% that had a “buy” rating in 2Q16.
Did Delta’s Guidance Cut Prompt a Losing Streak for Airlines?
Delta Air Lines (DAL) stock fell 3.5% after its traffic release on September 5, 2017. The negativity has spread to other players.
US Airlines Capacity Growth Outpaces Demand, Load Factor Drops
Decreasing load factors across the airline industry mean that airlines are not able to fill up their seats as fast as they are adding seats. This justifies investor fears of overcapacity.
How Truckload Carriers Have Returned Cash to Investors in 2Q17
J.B. Hunt Transport Services (JBHT) raised its share repurchases by $80.0 million in 1H17 compared with 2Q16.
Must-know: Alaska Airlines’ aircraft and fuel efficiency
In 2013, Alaska operated a fleet of 131 Boeing 737 jet aircraft. It had contracts with Horizon, Sky West Airlines, and Peninsula Airways for regional capacity. Horizon operated 51 Bombardier Q400 turboprop aircraft. It sells all of its capacity to Alaska according to its capacity purchase agreements.
How Old Dominion Freight Line Dominates the Less-Than-Truckload Industry
Old Dominion Freight Line (ODFL) is the United States’ major provider of regional, interregional, and national LTL (less-than-truckload) services.
FedEx Delivers Strong Fourth-Quarter Earnings
FedEx (FDX) announced its fourth-quarter earnings after the market closed on June 19. FedEx surpassed analysts’ adjusted EPS estimate by 3.6%.Industrials Why Ebola impacted the airline industry
During fatal disease outbreaks, rules and restrictions are imposed—especially on air transportation. This includes canceling flights to the affected areas.
Airline Industry Demand Continues to Grow in August
The demand for air travel experienced considerable growth in the month of August, driven by traditional vacation travel as well as lower fares of major air carriers.
Fornaro’s Turbulent Ride and Achievements at Spirit Airlines
For October, SAVE was ranked third on the metric according to the Department of Transportation. That’s a huge improvement since Spirit has historically been last.
Is Southwest’s Demand Growth Enough to Fill Its Added Capacity?
In November 2017, Southwest Airlines’ (LUV) traffic grew 3.4% year-over-year (or YoY). This growth was higher than its capacity growth of 2.5% YoY in the same month.
Airline Relative Valuations: What Is Priced In?
The airline industry is capital-intensive, with high levels of depreciation and amortization and varying degrees of debt and operating leases. To neutralize these factors, we use the EV-to-EBITDA ratio to value airline stocks.
Alaska Air Group Completes Virgin America Merger
On April 4, 2016, Alaska Air Group (ALK) announced its acquisition of Virgin America for $57 per share in cash, which amounted to $2.6 billion.
FedEx’s New Pricing Policy Improves Its Efficiency
Effective January 2015, FedEx changed its pricing policy for all of its FedEx Ground packages less than 3 cubic feet to a “dimensional weight pricing” mechanism.
FedEx Ground: Delivering on E-Commerce Growth
FedEx Ground is being driven by the booming growth in e-commerce, and it contributed to 35% of the company’s revenues but 44% of its profits.
What the Direction of October’s Truck Tonnage Index Indicates
In this article, we’ll look at the direction of the Truck Tonnage Index (or TTI) in October 2016.
Analyzing the Valuation Trend of Courier Services
The economic upturn since 2009 has improved growth prospects for the courier companies. This coupled with improving industry margins has led to improving industry valuations.Industrials Why the Ebola scare led to a 16% drop in the Airline Index
The share prices for major airline companies in the U.S. dropped substantially after the news of the first Ebola case in U.S. on September 30, 2014.
Airlines Passenger Yield Continues to Decline in August 2015
Passenger yield declined by 8% year-over-year for August 2015 to 15.3 cents from 16.6 cents. This is the highest decline since the start of the year.
Is a Rerating of Airlines’ Valuation Multiple Possible?
Currently, American Airlines (AAL), Southwest Airlines (LUV), and Alaska Air Group (ALK) are all trading at ~5x their forward EV-to-EBITDA multiples.
What Does UPS’s Supply Chain & Freight Segment Do?
UPS has addressed complex supply chain issues such as transportation, distribution, and international trade and brokerage services by offering a variety of services.
US Large-Cap Equity Funds: Is Active or Passive Investment Best?
Except for one fund (MIGFX), no other actively managed fund that we have reviewed in this series has been able to outperform the passively managed SPY.
Which US Trucking Carrier Has the Best Operating Cash Flow?
Operating cash flow is a vital parameter for judging the health of a transportation company because it points to efficiency in operating assets and liabilities.
S&P 500 Index Nears Record High amid Earnings Season
The S&P 500 Index, represented by the SPDR S&P 500 ETF (SPY), rose 0.3% on October 23, nearing the all-time high it saw in July.
Spirit Airlines: An Introduction to a Low-Cost Pioneer
Spirit Airlines (SAVE) is headquartered in Miramar, Florida. It’s a pioneer of ultra-low-cost carrier or ULCC airlines.
FedEx Express Is One of the Largest Express Networks in the World
FedEx Express offers three US overnight package delivery services: FedEx First Overnight, FedEx Priority Overnight, and FedEx Standard Overnight.
Get Real: Bulls Return, Equity Indexes Reach New Highs
In today’s Get Real newsletter, we discussed equity bulls’ return, Trump’s call to Boeing, and another loss for FedEx. Plus, change for Disney’s Hulu.
The global airline industry contributes to economic development
With 16,000 unique city pairs, connectivity by air is estimated to have doubled in the past two decades. Moreover, although demand continues to rise, the price of travel has fallen.
Airline Mergers and Acquisitions: Are We There Yet?
The most recent phase of consolidation that began in 2005 has seen 13 airline mergers and acquisitions. Four of these deals are worth special mention because they changed the face of the industry.
Initial Reactions from the Travel Industry after Trump’s Win
Just a few days ago, we wrote about how Trump had received very little support from the travel industry. Now that he’s been elected, what’s next?
Wall Street Analysts’ Recommendations for American Airlines
According to Reuters, of the 17 analysts tracking American Airlines (AAL), 23.5% (or four) have “strong buy” ratings on the stock.
Which Trucking Company Tops in Dividend Growth?
In the second quarter 2016, Werner Enterprises (WERN) declared a dividend of $0.06 per share. That’s an increase of 20% from the corresponding period last year.
Where Is UPS Making Its Next Set of Capital Investments?
For 2016, UPS has anticipated an investment of $2.8 billion in the procurement of capital assets.
Why Delta Air Lines Stock Fell after Q4 Earnings
Delta Air Lines (DAL) reported its fourth quarter 2016 results on January 12, 2016. The airline’s revenue fell.
Fewer Analysts Recommend ‘Buys’ on American Airlines
Analysts’ “hold” ratings on American Airlines stock have risen significantly. Nine analysts, a total of 56.3%, now have “hold” ratings on the stock.
Airline Stocks in Focus as US Airstrike Lifts Oil Prices
The US airline stocks are in focus as crude oil prices soar after the US assassinated a top Iranian military commander last Thursday night.
Get Real: Running the Gauntlet
In this morning’s Get Real market newsletter, we saw that Disney+ is running the gauntlet while Apple and Microsoft take the Dow to new heights.
Why Is American Airlines Warren Buffett’s Top Pick?
Berkshire Hathaway’s (BRK.B) November 2016 13F filing attracted considerable interest for airline investors. The 13F revealed Warren Buffett’s new investments in the airline sector—a sector he had written off during the past decade.Industrials Delta Air Line’s key operating segments and geographic segments
Delta Air Lines (DAL) derives 65.8% of its revenue from the passenger segment, 2.5% from the cargo segment, and 10.3% from other sources.
How Is UPS Valued Compared to Its Peers?
UPS’s forward PE ratio stands at 17.1x compared to its current PE ratio of 22.3. Analysts are expecting UPS’s earnings to grow in the next four quarters.
Alaska Air’s Low Debt: Is It an Advantage?
Alaska Air Group (ALK) has been trying to reduce its debt burden in order to strengthen its balance sheet in the long term.
Will American Airlines Increase Dividend Payouts?
American Airlines started paying dividends in mid-2014, joining the ranks of Delta Airlines, Southwest Airlines, and Alaska Air Group, the few dividend-paying airlines.
JetBlue Airways: What Are Analysts’ Recommendations?
JetBlue Airways (JBLU) is expected to release its 2Q16 earnings on July 26. According to an analyst consensus, JBLU is expected to earn $0.49 in 2Q16, compared to earnings per share of $0.44 in 2Q15.
Analyzing the Key Variables for the Airline Industry
Investors should keep an eye on airfare trends. Despite a 40% fall in crude oil prices—the major cost for airlines—airfares have remained fairly stable.
What are UPS’s Revenue Drivers?
Revenue drivers There are three main drivers of revenue growth for United Parcel Service (UPS): package volumes, product mix and pricing, and fuel surcharges. Package volumes and product mix and pricing are in turn driven by economic growth. Economic growth Increasing economic growth increases e-commerce demand, which in turn increases demand for courier services. […]
FedEx: A Concept that Blossomed into an Industry
FedEx achieved the distinction of being the first US company to reach $1.0 billion in revenues within the first ten years of operations without a single merger or acquisition.
Why Is Delta Air Lines’s Revenue Expected to Fall in 2016?
Analysts are estimating an ~4.5% decline in Delta Air Lines’s (DAL) revenue to $10.6 billion for 3Q16.
How the Boeing 737 Max Crash Could Affect Berkshire Hathaway
Boeing (BA) has been feeling the heat after its 737 Max 8 aircraft crashed on March 10—the second crash in five months.