Wolfe Trahan Published Research » Reports

The Wolfe Monthly Macro Watch: Freight Continues to Feel Better than the General Economy

Wolfe Trahan — Thu, 08 Jul 2010 14:46:23 +0000

This month’s macro looks mostly at May vol. trends with some June. While leading indicators and broader macro indicators are showing signs of weakness, freight remains very strong as inventory restocking seems to be driving freight vols well above GDP—best evidenced by strong int’l air, U.S. ocean import and domestic intermodal trends.

The Wolfe Monthly Macro Watch: Freight Trends Continue to Improve into May

Wolfe Trahan — Tue, 08 Jun 2010 19:02:21 +0000

This month’s macro looks mostly at April vol. trends with some May. Generally, domestic vols continue to improve with the rails showing the most consistent strength in recent months. Truck vols also continue to improve but took a modest step back in April after exceptionally strong improvement the prior 2 months. Our channel checks suggest demand was very strong in May, and no carriers or shippers at our Global Transport Conference 2 weeks ago noted any signs of a slowdown in demand or customer orders.

Parcel Paradise

Wolfe Trahan — Tue, 25 May 2010 12:08:04 +0000

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.

State of the Freight: Second Quarter

Wolfe Trahan — Mon, 24 May 2010 15:25:28 +0000

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.

Wabtec Corporation Initiation: Braking the Cycle – Solid Play on PTC

Wolfe Trahan — Thu, 20 May 2010 12:34:12 +0000

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

Wolfe Trahan — Fri, 14 May 2010 15:00:04 +0000

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!

The Wolfe Monthly Macro Watch: Freight Demand Holding Firm Through April

Wolfe Trahan — Fri, 14 May 2010 12:30:39 +0000

This month’s macro looks mostly at March vol. trends with some April. March vols across modes trended much better than seasonally normal (likely in part from some weather catch-up) led by Trucks and Rails. Our channel checks indicate that freight has remained strong through April and thus far into May, but below March levels.

Slides: Everything is About to Change… The Impact of Cyclical Forces on Investing in 2010

Wolfe Trahan — Wed, 05 May 2010 12:27:06 +0000

Chief Investment Strategist, François Trahan, will host a 45–minute conference call discussing: April Will Likely Mark The High Tide Of The Cycle For Leading Indicators, How Will A “Regime Shift” Influence Asset Allocation And Stock Selection?, and Unleashing The Power Of The Business Cycle In Quantitative Analysis. These are the slides from that call.

The Wolfe Monthly Macro Watch: Signs that Freight Remained Strong to Finish 1Q

Wolfe Trahan — Fri, 09 Apr 2010 12:08:15 +0000

All major freight modes we track—Rails, Trucks, Int’l Air, West Coast Ocean Ports and Cass shipments—remained positive y/y in the last month reported (Feb. or March) and y/y trends, adjusted for easy comps and seasonality, generally continue to improve into March. This is a nice improvement from last month’s macro (reflecting mostly Jan. data) when adjusted freight trends were not as strong as the reported numbers and upbeat commentary implied.

Fasten Your Seatbelts – Rough Road Ahead Launch Slide Report

Wolfe Trahan — Thu, 08 Apr 2010 15:10:00 +0000

These slides accompanied Tim Denoyer’s initiation conference call on the Auto & Truck Manufacturing industry. The 60 slide presentation introduced our coverage, summarized our overall views on the Auto & Truck OEM and Supplier sectors, and presented our proprietary industry survey and auto sales forecast model.