n the world of investing, everyone has a theory which is great and when something major has to the economy, some sectors should benefit more than others or there should be easy pickings. In the economy, oil prices have gone down which is good if you buy lots of fuel or transportation stocks. On May 29th in the Globe and Mail, Peter Ashton of Recognia Inc examined US Transportations stocks to see if the theory matches the reality. First Mr. Ashton limited or narrowed the field by setting a minimum market cap of $ 5 billion. When the price of energy was bouncing back and forth, the transportation sector was likely doing the same and he focused on companies whose stock prices has shown negative performances in the past 13 weeks. In addition, we desire growth and some companies analysts are projecting growth by 10% or more. The final piece is companies with a price to sales ratios of 5 or less.

Rank    Company                                 Ticker   Market Cap  Price            Projected EPS       Price to Sales                 Dividend Yield

(US billion)   Perform %     %                         Ratio   %                                %

1.     United Continental Hold         UAL-N         19.8             -26.8             280.5                     0.66                                   0.0

2.     American Airlines                     AAL-Q          28.8            -19.3              269.9                     0.86                                   0.9

3.     FedEx                                           FDX-N         49.4            – 2.1                  43.4                     1.19                                      0.46

4.     Alaska Air Group                        ALK-N           8.1             – 3.2                120.8                    1.59                                    1.25

5.     Delta Air Lines                             DAL-N       34.2              -12.9                47.2                     0.9                                      0.80

6.     Southwest Airlines                      LUV-N        24.1              -20.6             211.6                     1.57                                      0.80

7.    Expeditors Int’l of Washington EXPD-Q       8.9             – 2.9                  32.7                   1.36                                       1.56

8.   JB Hunt Transport                        JBHT-Q      9.9              – 1.8                   28.0                  1.61                                        0.99

9.    CH Robinson Worldwide            CHRW-Q    9.2              -14.9                 24.9                    0.78                                      2.40

10.   UPS                                                  UPS-N       90.6            – 1.8                  13.6                      1.50                                      2.90

11.    Old Dominion Freight                  ODFL-Q      6.0            -10.5                53.1                      2.32                                       0.0

12.     CSX                                                 CSN-N      34.4             – 2.2                 12.0                      2.59                                      2.10

13.      Union Pacific                               UNP-N      90.1             -16.1                 31.6                     3.97                                       2.20

14.     CN Railway                                    CNI-N       48.0            -13.7                 20.6                     4.88                                      1.70

15.     Kansas City Southern                   KSU-N     10.3             -21.7                 20.6                      4.39                                     1.40

Linking to dividend paying stocks – it is given fuel is a major cost to the operations of the companies, it is good to look at what happens if fuel costs go down. The market remains tough for other reasons – the economy is not as robust as expected, China does not need as much bulk commodities so there can other factors to fit into your equation, but having a theory is a great place to start.

There are more questions than answers, till the next time – to raising questions.