2010 Global Transportation Conference
Below is our list of research notes and reports published in conjunction with our Third Annual Global Transportation Conference in May 2010. Hard copies of these reports will be available for distribution at our conference, but they may be accessed electronically through these links. For our full, unfiltered library, please use the buttons at left. If you are a Wolfe Trahan client and can not access any of the links in our library, please contact to request our PDF decryption plug-in.Parcel Paradise
This 245-page primer report lays out our thesis for investing in the express stocks — UPS, FedEx, and TNT. We provide detailed background and market share data on the express industry, as well as histories of UPS and FedEx. We then discuss historical volume and yield trends, explore relevant regulatory/legislative issues, and review current and historical valuations and stock performance through cycles. We also lay out our thesis on why better pricing fundamentals for UPS and FedEx could be the most important drivers of their stocks over the next five years. We conclude with detailed profiles of each company and explain why we currently favor UPS over FedEx.
The Rail Regulatory Cheat Sheet
We expect Senator Rockefeller’s pending rail regulatory bill to become active in the Senate again, possibly before July 4th. This 2-page rail regulatory “cheat sheet” is perfect for your bulletin board as a handy reference piece. We lay out 12 key regulatory issues important for the railroads that are apart of Senator Rockefeller’s pending STB Reauthorization Bill. We discuss the key issues, along with potential changes to the bill as it goes through the Senate and potentially the House and the likely winners and losers among the rails. We also list current rate cases pending before the STB.
State of the Freight: Second Quarter
This 70 page report analyzes the results of over 150 shippers that filled out our second-quarter survey during mid-April. Within the report, we discuss in detail: pricing, volume, service and capacity trends across our transportation universe. The report looks at inventory restocking trends and how they could impact demand and supply through 2010 and into 2011. We also discus firming rate expectations across mostly all modes of freight, recent tightening of TL capacity and rising issues with rail service levels.
Inside Freight: Comprehensive Safety Analysis (CSA 2010) – A Deeper Look
The FMCSA’s CSA 2010 initiative is designed to improve safety on highways, creating a rating system for truckers based on safety standards. The FMCSA assigns a safety score to carriers using 7 safety performance categories which is based on violations and state inspection and crash reports. Implementation is expected in late C10 and early C11.
Wabtec Corporation Initiation: Braking the Cycle – Solid Play on PTC
Wabtec is one of the world’s largest suppliers of equipment for the freight and transit rail industries, and the company’s products can be found on virtually all U.S. locomotives, freight cars, subway cars and buses. Wabtec is well diversified across its freight and transit, domestic and international, and OEM and aftermarket segments, and seems well positioned to benefit from secular trends in favor of rail. However, we believe its diverse revenue mix likely will limit Wabtec’s upside operating leverage to an eventual turn in new railcar demand. We are initiating coverage with a Peer Perform rating at the previous day’s closing price of $44.62, and we look for a pullback to become more aggressive on the stock.
1Q:10 Postview Conference Call Slides
Ed Wolfe hosted a conference call to discuss takeaways from recent 1Q:10 earnings reports and our expectations for future trends. These are the SLIDES from that call. On this call, Ed will update our thesis on how to make money in the transports, long and short, including Our Top Stock Picks From Here and Why?; Why We Expect a Difficult 2H For the Transports; Which Stocks Already Discount Peak EPS In 2011?; Which Stocks Should Peak This Cycle Above Prior Cycles?; Which Stocks Should Hold Their Valuation Best as Leading Indicators Likely Peak and Level Off?; Current Trends In and Out of 1Q For Rails, Trucks and Airfreight & Logistics Companies; a Look at Recent Transport Stocks’ Performance and What it Tells Us About the Business Cycle; a View of the Macro Freight Economy Once Normalized For Extremely Easy y/y Comps; and an Appendix worth Saving on Your Shelf!
