Surface Transportation

We have a balanced view across our Transports coverage.  On Rails, we pivoted to a more constructive positon following the 2016 election results, which we think provides a backdrop, over time, for modestly better volumes, stronger pricing, less onerous regulation and the potential for a large boost from tax and capital expenditure policies.  Within the trucking world, our work indicates truckload utilization is at a near a trough, which history suggests should favor positioning in asset-light companies.  However, valuation progression since year-end, a pick-up in deal activity and a transitioning competitive landscape in the asset-light arena, leads us to reshuffle the playbook a bit.  Our recommendations take cues from our cycle playbook, but also lean towards companies with special situations and unrealized earnings power that is set to be unleashed. 

Top Picks:

  • Knight Transportation, Inc. (KNX)
  • XPO Logistics, Inc. (XPO)
  • Canadian Pacific Railway Limited (CP-CA)

Vertical Team

Brian Konigsberg
Vice President

Anthony (TJ) J. Toro