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James Li
James Li
Articles (1531) 

5 Transportation Companies With High Profitability

Stocks to consider as September durable goods orders outperform expectations

In light of growth in September durable goods orders topping consensus expectations, especially in transportation equipment, five transportation companies with high profitability and are trading below their GF Value are Grupo Aeroportuario del Sureste SAB de CV (NYSE:ASR), Forward Air Corp. (NASDAQ:FWRD), Guangshen Railway Co. Ltd. (GSH), Heartland Express Inc. (NASDAQ:HTLD) and Grupo Aeroportuario del Pacifico SAB de CV (NYSE:PAC) according to the All-in-One Screener, a GuruFocus Premium feature.

September durable goods order growth tops expectations, led by transportation equipment

On Tuesday, the Census Bureau reported that new orders for manufactured durable goods stood at $237.1 billion for September, up $4.3 billion from the comparable figure for August. The September increase of 1.9% smashed the forecasted growth of just 0.5% according to economists polled by Reuters.

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According to the report, transportation equipment orders increased $3 billion, or 4.1%, to $76.8 billion, up four out of the past five months and contributing most to the overall increase. The report also says that transportation equipment shipments led the increase in total shipments while unfilled orders declined for seven consecutive months.

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As such, investors may seek opportunities in transportation companies that have high financial strength and profitability and are trading below their GF Value line. GuruFocus' own valuation method takes a company's historical price multiples and adds internal adjustments based on the company's past performance and future growth estimates.

Grupo Aeroportuario del Sureste

Shares of Grupo Aeroportuario del Sureste traded around $121.25, showing that the stock is modestly undervalued with a price-to-GF Value ratio of 0.77.

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The Mexico City-based company operates nine airports in southeast Mexico under its government-granted concession. GuruFocus ranks the company's profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank, a high Piotroski F-score of 7 and an operating margin that is outperforming over 97.73% of global competitors despite declining approximately 4.1% per year on average over the past five years.

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Gurus with holdings in Grupo Aeroportuario del Sureste include Jim Simons (Trades, Portfolio)' Renaissance Technologies and Jeremy Grantham (Trades, Portfolio)'s GMO.

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Forward Air

Shares of Forward Air traded around $62.22, showing that the stock is modestly undervalued with a price-to-GF Value ratio of 0.83.

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GuruFocus ranks the Greenville, Tennessee-based freight and logistics company's profitability 9 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and a return on assets that outperforms 82.51% of global competitors.

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Guangshen Railway

Shares of Guangshen Railway traded around $8.76, showing that the stock is significantly undervalued with a price-to-GF Value ratio of 0.60.

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The Shenzhen, Guangdong-based company operates passenger and freight transportation services in southern China. GuruFocus ranks the company's financial strength 7 out of 10, driven by a good Piotroski F-score of 6 and a debt-to-equity ratio that outperforms 90% of global competitors, partially offset by a modest Altman Z-score of 2.11.

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Heartland Express

Shares of Heartland Express traded around $18.81, showing that the stock is modestly undervalued with a price-to-GF Value ratio of 0.88.

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The North Liberty, Iowa-based company provides truckload services across the U.S. and Canada. GuruFocus ranks the company's financial strength 9 out of 10 on several positive investing signs, which include a strong Altman Z-score of 6.47 and an interest coverage ratio that outperforms over 92% of global competitors.

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Grupo Aeroportuario del Pacifico

Shares of Grupo Aeroportuario del Pacifico traded around $91.42, showing that the stock is modestly undervalued with a price-to-GF Value ratio of 0.74.

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Grupo Aeroportuario del Pacifico operates 12 airports near the Pacific coastline of Mexico plus two airports in Jamaica. GuruFocus ranks the company's financial strength and profitability 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 3.56 and an operating margin that has increased approximately 0.8% per year over the past five years and is outperforming over 95% of global competitors.

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Disclosure: No positions.

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