Top 10 Transportation Companies To Invest In Right Now

The surge of natural gas production in the U.S. has opened several doors that many didn't think were previously economically feasible: Manufacturers are reconsidering a move back to the U.S. for cheap energy prices, using natural gas as a transportation fuel is not a joke, and we're even debating the merits of exporting natural gas.

One thing is certain: Our ability to extract shale gas has given the U.S. a competitive advantage that could potentially hold for a decade. According to panelists at the 2013 Energy Forward conference at the University of Chicago's Booth School of Business, only China has a shot at effectively producing from shale gas in the next 10 to 15 years. Let's look at how the U.S. will keep that position for that long and one policy that will prevent others from doing the same.

Top 10 Transportation Companies To Invest In Right Now: YRC Worldwide Inc.(YRCW)

YRC Worldwide Inc., through its subsidiaries, provides various transportation services worldwide. The company?s YRC National Transportation unit offers a range of services for the transportation of industrial, commercial, and retail goods, such as apparel, appliances, automotive parts, chemicals, food, furniture, glass, machinery, metal, metal products, non-bulk petroleum products, rubber, textiles, wood, and other manufactured products. It serves manufacturing, wholesale, retail, and government customers. As of December 31, 2009, it had 11704 owned tractors, 1239 leased tractors, 50083 owned trailers, and 3244 leased trailers. Its YRC Regional Transportation unit?s service portfolio includes regional delivery, which comprises next-day local area delivery and second-day services, consolidation/distribution services, protect-from-freezing and hazardous materials handling, and various specialized offerings; expedited delivery, that comprises day-definite, hour-definite, and time definite capabilities; inter-regional delivery; cross-border delivery; and operation of my.yrcregional.com and NewPenn.com, which are e-commerce Websites offering online resources to manage transportation activity. The company?s YRC Logistics units? service portfolio consists of distribution services that include flow through and pool distribution, dedicated warehousing, and value-added services; global services, which comprise international freight forwarding, customs brokerage, and value-added services; and transportation services, such as truckload brokerage, domestic freight forwarding, and transportation management. Its YRC Truckload unit provides customized truckload services on regional and national level through the use of company and team-based drivers. The company was founded in 1924 and is headquartered in Overland Park, Kansas.

Top 10 Transportation Companies To Invest In Right Now: China Metro-Rural Holdings Limited(CNR)

China Metro-Rural Holdings Limited, through its subsidiaries, primarily engages in the development and operation of agricultural logistics and trade centers in northeast China. It also involves in purchasing, processing, assembling, merchandising, and distributing pearls and jewelry products. The company markets its pearls and jewelry products to wholesale distributors and mass merchandisers in Europe, the United States, Hong Kong, and other parts of Asia. In addition, it develops, sells, and leases residential and commercial properties in Hong Kong and the People?s Republic of China. The company is based in Tsimshatsui, Hong Kong.

Advisors' Opinion:

• [By Wyatt Research Staff]

  The stock moved significantly higher in mid-January and traded in a fairly tight range ever since. However, that could change soon. China's agricultural exports to Japan will grow if radiation continues to seep into the food chain.

  China exported $593 million worth of agricultural goods to Japan last year.

Top 5 Tech Stocks To Watch Right Now: Rhino Resource Partners LP(RNO)

Rhino Resource Partners LP produces, processes, and sells coal of various steam and metallurgical grades in the United States. The company holds interests in various surface and underground coal mines located in Central Appalachia, Northern Appalachia, the Illinois Basin, and the Western Bituminous region. As of December 31, 2010, it operated 10 mines, including 5 underground and 5 surface mines located in Kentucky, Ohio, and West Virginia. The company markets its steam coal primarily to electric utility companies as fuel for their steam-powered generators; and metallurgical coal for steel and coke producers. It also engages in mining limestone from reserves located at its Sands Hill mining complex and sells it as aggregate to various construction companies and road builders. The company was founded in 2003 and is based in Lexington, Kentucky.

Top 10 Transportation Companies To Invest In Right Now: United Parcel Service Inc.(UPS)

United Parcel Service, Inc., a package delivery company, provides transportation, logistics, and financial services in the United States and internationally. It operates in three segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. The U.S. Domestic Package segment engages in the time-definite delivery of letters, documents, and packages in the United States. The International Package segment offers air and ground delivery of small packages and letters to approximately 220 countries and territories, including shipments outside the United States, as well as shipments with either origin or distribution outside the United States; export services; and domestic services move shipments within a country?s borders. The Supply Chain & Freight segment provides forwarding and logistics services, such as supply chain design and management, freight distribution, customs brokerage, mail, and consulting services in approximately 195 countries and territorie s; and less-than-truckload and truckload services to customers in North America. In addition, the company offers various technology solutions for automated shipping, visibility, and billing; information technology systems and distribution facilities to various industries comprising healthcare, technology, and consumer/retail; and a portfolio of financial services that provides customers with short-term working capital, government guaranteed lending, global trade financing, credit cards, and export financing. It operates a fleet of approximately 99,800 package cars, vans, tractors, and motorcycles; an air fleet of 527 aircraft; and 33,800 containers used to transport cargo in its aircraft. The company was founded in 1907 and is headquartered in Atlanta, Georgia.

Advisors' Opinion:

• [By Buffett]

   As the world's largest package delivery company, United Parcel Service (UPS) is the kind of toll-bridge operator that Buffett likes to invest in. When a business ships something, UPS gets a cut. Plus the sheer size of its global shipping network give UPS the kind of economic moat that Buffett likes to see. So do high customer-satisfaction ratings and conscientious drivers -- even if they do have to wear shorts.

  "This is not a business that you can re-create overnight," says Lowenstein. In fact, competitors have a tough time because UPS is so strong. DHS left the U.S. shipping market in 2009, and the U.S. Postal Service is struggling financially.

  That economic moat and broad reach also give UPS the pricing power, high profit margins and steady earnings growth favored by Buffett, whose Berkshire Hathaway owns 1.4 million shares. Here's another quality the Oracle of Omaha likes: UPS is shareholder friendly, returning excess capital through dividend hikes, share buybacks and debt retirement. "They are good capital allocators. They are not destroying value by doing dumb things," says Lowenstien.

  Despite these strengths, UPS looks cheap, because with a price-to-earnings ratio of 14.9, it trades about 30% below its average since 2000. In short, that means today's price is relatively low. "UPS is on sale due to concerns about the economy," says Lowenstein. And like Buffett, Lowenstein is a patient value investor who believes that sooner or later those concerns will blow over. When that happens, UPS stock will deliver for investors who buy now.

Top 10 Transportation Companies To Invest In Right Now: Union Pacific Corporation(UNP)

Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, provides rail transportation services in North America. It has approximately 31,953 route miles linking Pacific Coast and Gulf Coast ports with the Midwest and eastern United States gateways, and provides several corridors to Mexican gateways. The company offers freight transportation services for agricultural products, including whole grains and related commodities, food, beverage products, corn for ethanol products and its by-products, animal feeds, fruits and vegetables, frozen meat, and poultry products; and automotive products, such as imported and finished vehicles, and automotive parts and materials. It also provides transportation services for chemicals, such as industrial chemicals, plastics, and liquid petroleum products; energy products comprising coal and coke; industrial products, including lumber products, paper and consumer goods, furniture and appliances, and nonferrous and i ndustrial minerals, as well as steel and construction products, such as rock, cement, and roofing materials; and intermodal containers. Union Pacific Corporation was founded in 1862 and is based in Omaha, Nebraska.

Advisors' Opinion:

• [By Jonas Elmerraji]

  2013 has been a strong year for shares of Union Pacific (UNP). Shares of the $70 billion railroad stock have rallied almost 19% this year, buoyed by overall strength in the transports sector. UNP is the largest railroad on the continent, with more than 32,000 miles of track that links 23 states, Canada and Mexico. That scale puts the firm in a strong position to grab more freight volume as the economy warms up.

  While oil prices have dipped recently, they're still on the high end of their historic range, and that actually bodes well for railroads. In general, rail shipping costs around one-fourth as much as trucking does per ton shipped, a cost advantage that typically sends customers setting aside the convenience factor of truck freight once fuel prices get past a certain point. The firm's hefty commodity exposure is a little less attractive right now, but that hasn't stopped Union Pacific from posting impressive revenue numbers lately.

  UNP has a deep economic moat. Railroad assets aren't easily copied by rivals – and they're extremely costly to maintain. While that does mean that UNP has some hefty fixed costs to overcome, its scale easily makes up for that drawback. With much better efficiency than the firm had just a couple of years ago, Union Pacific looks well positioned for 2013. We're betting on shares of this Rocket Stock this week.

• [By Robert Holmes]

   Analyst William Greene says Union Pacific is one of the firm's best ideas as it is one of the most compelling stocks in freight transportation.

  "We are bullish on the rail industry's advantage over its truck competitors including lower unit costs for high tonnage freight and greater customer captivity," Greene writes. "Given UNP's particularly favorable exposure to the key themes underpinning our rail thesis, we believe UNP will see secular EPS growth."

  Greene specifically highlights Union Pacific's latent pricing power, its operating leverage to long-term volume growth, and long-term productivity improvement.

  Greene's base case calls for a 26% rise in share price next year, although his most bullish outlook for Union Pacific has the stock up 38% next year. His most bearish scenario has the stock down 12% next year.

• [By Rebecca Lipman]

   Through its subsidiary it provides rail transportation services in North America. Market cap of $48.89B. EPS growth (5-year CAGR) at 17%. According to Morgan Stanley: "We are bullish on the rail industry's advantage over its truck competitors including lower unit costs for high tonnage freight and greater customer captivity."

• [By Richard Young]

  Union Pacific (NYSE:UNP) has paid a dividend on its shares every year for 112 years. On Nov. 17, Union Pacific’s board announced a dividend increase of 26%. That was the second dividend increase of 2011, raising the quarterly dividend to 60 cents a share, up from 38 cents at the beginning of the year. Union Pacific is aiming to pay out more.

   

  Take a look at the long record of outperformance on my relative strength chart for UNP. Over the last five years, UNP has outperformed the S&P by over 150%.

Top 10 Transportation Companies To Invest In Right Now: Ryder System Inc.(R)

Ryder System, Inc. provides transportation and supply chain management solutions. It operates in three segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Contract Carriage (DCC). The FMS segment offers leasing, contract maintenance, contract-related maintenance, and commercial rental of trucks, tractors, and trailers primarily in the United States, Canada, and the United Kingdom. It also offers fleet support services, such as fuel, insurance, safety, administration, environmental management, and information technology services. In addition, this segment sells its used vehicles through 55 company owned retail sales centers, as well as through its Web site, Usedtrucks.Ryder.com. Its customers include small businesses and enterprises operating in transportation, grocery, lumber and wood products, food service, and home furnishings industries. The SCS segment provides supply chain consulting solutions in North America and Asia. It offers di stribution management, transportation management, and professional services, as well as various support services, such as information technology and engineering solutions. This segment primarily serves automotive, electronics, high-tech, telecommunications, industrial, consumer goods, consumer packaged goods, paper and paper products, office equipment, food and beverage, and general retail industries. The DCC segment offers vehicles and drivers as part of a transportation solution in the United States. It combines the equipment, maintenance, and administrative services of a service lease with drivers and additional services, such as routing and scheduling, fleet sizing, safety, regulatory compliance, risk management, technology and communication systems support, and other technical support. This segment serves energy and utility, metals and mining, retail, construction, healthcare products, and food and beverage industries. The company was founded in 1933 and is based in Mia mi, Florida.

Top 10 Transportation Companies To Invest In Right Now: Saia Inc.(SAIA)

Saia, Inc., an asset-based trucking company, provides transportation and supply chain solutions primarily to the retail, chemical, and manufacturing industries in the United States. The company, through it subsidiary, Saia Motor Freight Line, LLC, offers regional and interregional less than truckload (LTL) services, selected national LTL, and time-definite services. It was formerly known as SCS Transportation, Inc. Saia, Inc. was founded in 2000 and is headquartered in Johns Creek, Georgia.

Advisors' Opinion:

• [By Michael]

  Saia, Inc. is an asset-based trucking company that provides a variety of transportation and supply chain solutions to a range of industries, including the retail, chemical and manufacturing industries. Its EPS forecast for the current year is 0.77 and next year is 1.34. According to consensus estimates, its topline is expected to grow 10.87% current year and 7.41% next year. It is trading at a forward P/E of 12.35. Out of eight analysts covering the company, four are positive and have buy recommendations and four have hold ratings.

Top 10 Transportation Companies To Invest In Right Now: Canadian Pacific Railway Limited(CP)

Canadian Pacific Railway Limited, through its subsidiaries, operates as a transcontinental railway providing freight transportation services, logistics solutions, and supply chain expertise in Canada and the United States. It transports bulk commodities, including grain, coal, sulphur, and fertilizers; merchandise freight; finished vehicles and automotive parts; forest products, which include wood pulp, paper, paperboard, newsprint, lumber, panel, and oriented strand board; and industrial and consumer products comprising chemicals, energy, and plastics, as well as mine, metals, and aggregates. The company provides rail and intermodal transportation services over a network of approximately 14,700 miles serving the principal business centers of Canada, from Montreal to Vancouver, British Columbia; and the Midwest and Northeast regions of the United States. Canadian Pacific Railway Limited was founded in 1881 and is headquartered in Calgary, Canada.

Advisors' Opinion:

• [By Richard Young]

  With the Obama administration’s denial of pipeline transportation routes to the south, Canadian oil producers are looking to rail to transport their crude out of Alberta. Canadian Pacific Railway (NYSE:CP) has signed a deal with NuStar Energy (NYSE:NS) to bring oil from the refiner’s Saskatchewan terminal to the coastal cities of Canada for export to emerging markets. CP has a fleet of 1,700 cars for transporting oil.

  My long-term chart shows CP shares reverting quickly to trend. Buy.

Top 10 Transportation Companies To Invest In Right Now: Norfolk Souther Corporation(NSC)

Norfolk Southern Corporation, through its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods primarily in the United States. The company transports coal products, such as coal, coke, and iron ore; automotive products, including finished vehicles and auto parts; chemicals products consisting of sulfur and related chemicals, petroleum products, chlorine and bleaching compounds, plastics, rubber, industrial chemicals, chemical wastes, and municipal wastes; metals and construction products comprising steel, aluminum products, machinery, scrap metals, cement, aggregates, bricks, and minerals; and paper, clay, and forest products, including lumber and wood products, pulp board and paper products, wood fibers, wood pulp, scrap paper, and clay. It also transports agriculture, consumer, and government products, such as soybeans, wheat, corn, fertilizer, animal and poultry feed, food oils, flour, beverages, canned goods, swee teners, consumer products, ethanol, and items for the military. In addition, it engages in the intermodal operations that include moving of shipments in trailers, the United States and international containers, and roadrailer equipment. Further, the company transports overseas freight through various Atlantic and Gulf Coast ports, as well as provides a range of logistics services; and operates passenger and commuter trains. Additionally, it involves in the acquisition, leasing, and management of coal, oil, gas, and minerals; the development of commercial real estate; telecommunications; and the leasing or sale of rail property and equipment. As of December 31, 2010, the company operated approximately 20,000 route miles in 22 states and the District of Columbia. The company was founded in 1883 and is based in Norfolk, Virginia.

Advisors' Opinion:

• [By Sam Collins]

  Norfolk Southern Corporation (NYSE: NSC) is a rail transportation company that moves raw materials, intermediate products and finished goods that represent a broad cross-section of the economy with an emphasis on energy (coal). We’ve been following NSC for a long time, and it has provided many profitable trades.

  During periods of high energy costs, railroads tend to do much better than other transportation companies because of their fuel usage advantage — they are able to carry large amounts of cargo at a fraction of the cost of trucks and air freight. NSC is one of the most efficient railroads in the country, operating over 21,000 miles in 22 Eastern states.?

  S&P has a “four-star buy” rating on NSC with a target of $75. Technically, note the cup-and-handle breakout that supports a trading target of $75.

Top 10 Transportation Companies To Invest In Right Now: Expeditors International of Washington Inc.(EXPD)

Expeditors International of Washington, Inc. provides logistics services in the United States and internationally. The company?s services include consolidation or forwarding air and ocean freight; distribution management; vendor consolidation; cargo insurance; purchase order management; and customized logistics information. Its airfreight services comprise the procurement of shipments from its customers; determination of the routing; consolidation of shipments bound for a particular airport distribution point; and selection of the airline for transportation to the distribution point. The company also offers breakbulk services that include receiving and breaking down consolidated airfreight lots and arranging for distribution of the individual shipments. Its ocean freight and ocean services include ocean freight consolidation; and handling full container loads. In addition, the company acts as a customs broker, who assists importers to clear shipments through customs by pre paring required documentation, calculating and providing for payment of duties on behalf of the importer, arranging for any required inspections by governmental agencies, and arranging for delivery; and provides other value added services at destination, such as warehousing and product distribution, time definite transportation, and inventory management. Further, it offers custom clearances for goods moving by rail and truck between the United States, Canada, and/or Mexico; and customs consulting services The company?s customers primarily include retailers, distributors of consumer electronics, department store chains, clothing and shoe wholesalers, manufacturers, and catalogue stores. Expeditors International of Washington, Inc. was founded in 1979 and is based in Seattle, Washington.