Below is our research library, listed in reverse chronological order. Please use the search box to look for research on a specific company or topic, or use the Calendar, Archives, or Sector links at left to browse for research from a specific time period or sector. If you are a Wolfe Trahan client and can not access any of the links in our library, please contact ITSupport@WolfeResearch.com to request our PDF decryption plug-in.
According to published schedule data, AMR appears likely to reduce its system-wide capacity by 1.7% y/y over the next three months (Feb-Apr), a rate that is in line with last week’s schedule covering the same time period. While overall capacity was unchanged, there were changes domestically and on the transatlantic (Note we classify Puerto Rico and parts of the Caribbean as domestic, consistent with the DoT). Latin and Pacific capacity remained unchanged.
WAB’s stock dropped 4% in late trading on January 31 after news circulated that the U.S. House Transportation Committee will release draft legislation this week to delay mandatory implementation of Positive Train Control (PTC) by 5 years from the end of 2015 to 2020. Reports indicate this will be part of the broader highway reauthorization bill expected to be introduced on Thurs.
Dividend increases are both a capital allocation decision and a corporate action, both of which are areas we closely monitor. Intuitively, a dividend increase should signal a position of financial strength and continued strong cash flow generation and, therefore, positive future stock price performance. In this report, we test this thesis and summarize our findings from analyzing the historical stock price performance of companies’ increasing dividends to shareholders. Historically, we find share price outperformance in the 3-month, 6-month, 1-year, 2-year, and 3-year periods after a dividend increase with a 4.8% one year relative sector outperformance (11.7% one year absolute total return). These returns compare with higher returns for dividend initiations where we found an 8.8% one year relative sector stock price outperformance (16.1% absolute return).
The pushback has eased. We wouldn’t say that the crowd embraces our view just yet, but it’s clear that the folks arguing vehemently in the first few weeks of the year have quieted down in the past week or so. We are, after all, approaching the four-month anniversary of the rally and recovery in LEIs and this is the amount of time it took last year for investors to change their tunes on the outlook. Since the business remains largely driven by bottom-up investors, it takes a change in the language/attitudes of companies for the Street to truly embrace a view … maybe earnings season is beginning to do that.
We have many clients that are uncomfortable with the rise in oil prices taking place alongside the rally in equities. This is similar to what happened in 2009 and again in late 2010. To be sure, this is actually similar to what used to happen with the Fed Funds Rate. Indeed, for the past decade, stocks rose alongside official rates. Think of oil as a new form of tightening and there is nothing odd about its current behavior.
The good news on the oil front is that natural gas, and gasoline to a lesser extent, have not kept up with the rise in oil. This suggests to us that the economic tipping point for oil is likely far higher than last year’s $128/barrel. Moreover, the fact that the economy is now creating jobs also argues for a higher oil threshold than in the past. All that said, we track the relationship between oil closely as the charts above show. If we were to see a rise in oil and a loss of momentum in the market we would probably have to change our bullish tune. The good news for now is that the relationship seems very strong. Enjoy while it lasts.
UPS announced it will stop amortizing pension gains/losses over time, and will book them in the year incurred with a mark-to-market adjustment in 4Q. This has no impact on pension plan cash funding, overall cash flow, or the net balance sheet. Several other companies have made this change over the past year including HON, IBM, T and VZ.
ABFS’s stock fell 15% on Friday after reporting 4Q continuing EPS of $0.08, well below Cons. of $0.25 and our $0.26 estimate. EPS fell from $0.51 in 3Q, but still improved from a loss of $0.12 a year ago. Rev. grew 5% y/y in 4Q, 165bp worse than our expectations and decelerated from +15% growth last qtr. Margin improvement of 180bp also slowed from 450bp of OR improvement in 3Q.
Ford reported 4Q EPS $0.20, below our $0.24 and Cons. $0.25, with pretax income missing by even more at $1.1B vs our $1.5B est. The 28% adjusted tax rate was closer to fully-taxed but below guidance of about 35%, helping EPS by $0.02. This is Ford’s 3rd miss in its past 5 reports.
The level of the WTLEI rose slightly in a relatively mild week for financial markets. Thus far for the month of January, the WTLEI has risen nearly 5.5%, the largest one-month rise since early 2010. All four of the reported leading indicators have ticked up and have brought some reassuring news regarding employment and manufacturing. This week will bring 7 more leading indicator reports for January, including the national ISM Manufacturing and Services reports. Stay tuned!
The three components of the WTLEI were mixed last week with the market and sentiment components slightly higher and the economic component slightly lower. Most of the weakness in the economic component was driven by the policy outlook while strength in the other components was broad-based.
Welcome to our Friday Freight report. We distribute this product each Friday mid-day, so clients have some freight reading material to make their weekends truly worthwhile! We always appreciate your feedback if you have any suggestions. Have a great weekend! This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On highway diesel, Rail diesel, and Jet fuel.
WERN reported 4Q EPS of $0.40, $0.01 above Cons. Compared with our higher end est., VAS and Other were $0.02 better, while Truck was $0.03 worse. Consolidated Rev., EBIT and EPS grew by 10%, 22% and 21% y/y in 4Q, similar to 3Q. WERN has now reported 20%+ EPS growth for 8 consecutive qtrs.
- Coverage List
- Consolidated Research Library
- Airfreight & Surface Transportation Library
- Portfolio Strategy & Quantitative Analysis Library
- Accounting & Tax Policy Library
- Auto & Truck Manufacturing Library
- Airlines Library
- Conference Calls
- Interactive Doh! Models
- Ed Wolfe Bi-Weekly Freight Update
Filter by Ticker
- Chris Senyek
- Ed Wolfe & Scott Group
- Hunter Keay
- Steve Fleishman
- Tim Denoyer