Trucking Companies Point to Stable US Economy (JBHT, LSTR, SWFT, CGI, ODFL, CNW)

As an indicator of US economic trends, the trucking industry has been a consistent leading indicator of the direction the economy is heading. No economic downturn has ever been recorded without trucking first turning negative.

And right now, US trucking companies have turned in a 29th consecutive month of growth according to April tonnage data. Trucking companies like J.B. Hunt Transport Services Inc. (NASDAQ: JBHT), Landstar System Inc. (NASDAQ: LSTR), Swift Transportation Co. (NYSE: SWFT), Celadon Group Inc. (NYSE: CGI), Old Dominion Freight Line Inc. (NASDAQ: ODFL), and Con-Way Inc. (NYSE: CNW) are either posting share price gains or poised to.

Bloomberg News cites transportation forecaster FTR Associates’ April’s truck loadings index of 115.9 — the highest reading since 2008 — as further evidence that the US economy continues to expand, even if slowly. Landstar affirmed its earnings estimate of $0.71-$0.76 in late May, further enforcing the slow, if wobbly growth of the US economy.

Weaker retail sales and forecasts have dampened the enthusiasm for trucking stocks somewhat, but the retail outlook reflects more careful inventory management among retailers and shippers.

Over the past two months, Con-Way, Celadon, and J.B. Hunt have all seen share prices rise by 10% or better, with most of the growth coming in the last month. Con-way is up another 4% today, at $37.62 in a 52-week range of $20.56-$42.38. Celadon is up nearly 2% today, at $16.41 in a 52-week range of $8.18-$16.50, and J.B. Hunt is up about 0.5% at $60.94 after posting a new 52-week high this morning of $61.12.

Paul Ausick