It’s been slow and steady for American truckers as tonnage continues its monthly stair stepping pattern toward the all-time high of 142.7 hit back in February 2016 (June 2017 declined 4.3% to 138.5). According to the American Trucking Association (ATA), 2017 will be a banner year for the industry that sees 10.7 billion tons or 70% plus of US freight travel on roads and highways.
Looking at historical data, trucking demand is routinely slow during the second quarter of the year, which allows the spotlight to land on Landstar Systems (LSTR) and Werner Enterprises (WERN) during their second quarter earnings reports. While LSTR and WERN showed significant and impressive growth, it’s imperative to note our other holdings performance Swift Transportation Company (SWFT) and J.B. Hunt Transport Services (JBHT).
Keep in mind that while some numbers may not be pleasing to the naked eye, this quarter generally sees softer than normal truckload demand. So although a company may experience loss in revenue or cost increases, these numbers aren’t necessarily impacting business performance.
October 2017 Update - Since we issued our report on the Trucking Industry on August 9, the sector has been on fire. Two of the company’s featured have hit or surpassed the target, and all four are up over 15%. We still believe these stocks have room to the upside and are raising our price targets. Please note that SWFT is now KNX.
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