Optimistic Reports From The Delivery Services Industry Bodes Well For This Transportation ETF
“On Thursday FedEx (FDX) reported fiscal third-quarter earnings that topped already optimistic expectations. Earnings per share of 76 cents were more than double the 31 cents in the year-ago quarter and topped the average analyst estimate for 72 cents. The news follows last month’s fourth-quarter report from rival UPS (UPS), where earnings increased nearly threefold from a year ago,” Don Dion Reports From The Street.
Dion goes on to say, “As good as FedEx’s earnings appeared to be, however, perhaps the more important element to the report was the company’s outlook and guidance for the near future. After reporting strength across all divisions, FedEx raised its EPS forecast for the current fiscal year from $3.75 to $3.80. Analysts have traditionally used the health of FedEx and UPS as a barometer for the broader U.S. economy because of the volume and diversity of the goods shipped by the companies. Impressive numbers like those released Thursday provide reassurance that the domestic and global economy remain on the road to recovery.”
“When it comes to ETFs, the best way to play FedEx and the rest of the delivery services industry is through the iShares Dow Jones Transportation Average Index (IYT). Although IYT tracks all aspects of the U.S. transportation sector, FedEx and UPS have commanded the first and third positions since the index dropped Burlington Northern Santa Fe (BNI) at the start of the year. Together, the two competitors command 20% of the fund. Delivery services in general account for nearly a quarter of the fund’s total portfolio. This slice of the fund has nearly overtaken the rail industry, which today represents 27% of IYT. Prior to dropping BNI, railroads accounted for more than 30% of the ETF,” Dion Reports.
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We have put some details together on the iShares Dow Jones Transportation Average ETF (IYT) including it’s holdings below:
The investment (IYT) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones Transportation Average index. The fund uses a representative sampling strategy to try to track the index. The index measures the performance of the transportation sector of the U.S. equity market. The index includes companies in the following primary groups: airlines, trucking, railroads, air freight, transportation services and industrial services. It is nondiversified.
Holdings Detail as of 3/17/2010 (Holdings subject to change)
| Symbol | |||||||
|---|---|---|---|---|---|---|---|
| (FDX) | FEDEX CORP | 11.66 | $61,995,855 | – | XNYS | Delivery Services | 1.00 |
| (UNP) | UNION PACIFIC CORP | 9.10 | $48,362,380 | – | XNYS | Railroads | 1.00 |
| (UPS) | UNITED PARCEL SERVICE-CL B | 8.02 | $42,606,796 | – | XNYS | Delivery Services | 1.00 |
| (CHRW) | C.H. ROBINSON WORLDWIDE INC | 7.02 | $37,306,658 | – | XNGS | Trucking | 1.00 |
| (NSC) | NORFOLK SOUTHERN CORP | 7.01 | $37,252,142 | – | XNYS | Railroads | 1.00 |
| (CSX) | CSX CORP | 6.48 | $34,448,538 | – | XNYS | Railroads | 1.00 |
| (R) | RYDER SYSTEM INC | 4.98 | $26,484,276 | – | XNYS | Transportation Services | 1.00 |
| (LSTR) | LANDSTAR SYSTEM INC | 4.94 | $26,237,732 | – | XNGS | Trucking | 1.00 |
| (EXPD) | EXPEDITORS INTL WASH INC | 4.93 | $26,180,220 | – | XNGS | Delivery Services | 1.00 |
| (KSU) | KANSAS CITY SOUTHERN | 4.79 | $25,454,507 | – | XNYS | Railroads | 1.00 |
| (CNW) | CON-WAY INC | 4.79 | $25,454,384 | – | XNYS | Trucking | 1.00 |
| (JBHT) | HUNT (JB) TRANSPRT SVCS INC | 4.76 | $25,283,843 | – | XNGS | Trucking | 1.00 |
| (OSG) | OVERSEAS SHIPHOLDING GROUP | 4.50 | $23,935,216 | – | XNYS | Marine Transportation | 1.00 |
| (ALEX) | ALEXANDER & BALDWIN INC | 4.49 | $23,875,278 | – | XNYS | Marine Transportation | 1.00 |
| (GMT) | GATX CORP | 4.02 | $21,384,985 | – | XNYS | Commercial Vehicles & Trucks | 1.00 |
| (CAL) | CONTINENTAL AIRLINES-CL B | 2.96 | $15,749,775 | – | XNYS | Airlines | 1.00 |
| (LUV) | SOUTHWEST AIRLINES CO | 1.72 | $9,149,471 | – | XNYS | Airlines | 1.00 |
| (DAL) | DELTA AIR LINES, INC. | 1.40 | $7,421,504 | – | XNYS | Airlines | 1.00 |
| (AMR) | AMR CORP | 1.31 | $6,951,388 | – | XNYS | Airlines | 1.00 |
| (JBLU) | JETBLUE AIRWAYS CORP | 0.91 | $4,829,261 | – | XNGS | Airlines | 1.00 |
| – | BLACKROCK FDS III | 0.10 | $515,061 | – | – | S-T Securities | 1.00 |
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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
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