Air Transport Services Group (NASDAQ:ATSG) provides aircraft leasing, airline operations, and aircraft maintenance and other support services to the air cargo transportation and package delivery industries in the United States and internationally. The Ohio-based company has over 2,000 employees and was founded in 1980. The stock is a Zacks Rank #2 (Buy) that gives investors an opportunity to profit off of Amazon's busy delivery season.
Air Transport is valued at $800 million with a Forward P/E of 20. The stock sports Zacks Style Scores of "B" in Value and Growth. The company has no dividend and will report earnings on November 3rd.
Estimate revisions for fiscal year 2017 have shot up 19% over the last 90 days, going from $0.80 to $0.95. While the current quarter looks flat, look for the holiday season to help the company into the first quarter of 2017.
Last quarter, the company had some comments on improving margins and the opportunity to fly for Amazon.
"Our operating performance across the board in the second quarter was strong, and yielded financial results that met or exceeded our targets. Last week, we leased and began operating the tenth of twenty 767 freighters we will fly for Amazon. We expect margins to improve substantially in the second half as we approach our year-end 2016 target of forty-three dry-leased 767 freighters, and increase from twenty-two to thirty the number of those we operate for customers under multi-year CMI agreements. We have increased acquisitions of 767-300 airframes, and have secured the conversion slots to satisfy strong customer demand."
Given this opportunity and that the recent trend is EPS beats, ATSG looks poised to breakout. The company has only missed on EPS since 2014, and the stock price has reflected that, more than doubling from its 2014 lows.
C.H. Robinson Worldwide (NASDAQ:CHRW) is a third-party logistics company that is a Zacks Rank #3 (Hold). It provides freight transportation services and logistics solutions to companies in various industries worldwide. CHRW provides truckload services as well as custom broker services to move good from point A to B.
The company has a $10 billion market cap with a forward P/E of 19. The stock sports a Zacks Style score of "A" in Growth and has a VGM score of "B".
Analysts have been slowly lowering estimates for the company, but a robust holiday season could change the outlook and help Robinson's rank improve. The company is on an impressive streak of beating on EPS, with five straight surprises to the upside. The stock has been stuck in a trading range for the last two years, and a busy holiday season should lead to a breakout in the stock.
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