Here's Why You Should Add C.H. Robinson Stock to Your Portfolio Now

Copa Holdings, S.A. CPA reported traffic numbers for October 2024 on the back of upbeat air-travel demand. Driven by high passenger volumes, revenue passenger miles (a measure of traffic) improved on a year-over-year basis in October.

To match the demand swell, CPA is increasing its capacity. In October, available seat miles (a measure of capacity) increased 6.6% year over year. Revenue passenger miles increased 6.5% year over year. Although traffic improved on a year-over-year basis, it failed to outpace capacity expansion. As a result, the load factor (percentage of seats filled by passengers) fell to 87.4% from 87.6% in October 2023.

Apart from Copa Holdings, we found another airline company, Ryanair Holdings RYAAY, aEuropean carrier, also reported impressive traffic numbers for October 2024.

The number of passengers transported on Ryanair flights was 18.3 million in October 2024, reflecting a 7% year-over-year increase. The October load factor (percentage of seats filled by passengers) of 93% remained flat on a year-over-year basis, reflecting consistent passenger demand for the airline's services. RYAAY operated more than 103,200 flights in October 2024.

To meet the upbeat demand, Ryanair expects its traffic view to grow 8% on a year-over-year basis for fiscal 2025, subject to no worsening of current Boeing delivery delays.

CPA’s Zacks Rank & Price Performance

CPA currently carries a Zacks Rank #2 (Buy).

Shares of CPA have gained 10.6% over the past three months compared with 18% growth of the Zacks Airline industry.

Three-Month Price Comparison

Canadian Pacific Kansas City CP is bolstered by robust cost-cutting initiatives, which contribute to the company’s prospects. The shareholder-friendly approach also bodes well for the company. However, CP is grappling with weak liquidity.

Factors Favoring CP

Canadian Pacific's proactive cost-cutting initiatives are commendable, resulting in impressive operational efficiencies in the second quarter of 2024. The company achieved an 8% reduction in the average terminal dwell time and increased average train speed by 6%, showcasing enhanced processing capabilities and improved network fluidity.

In the same period, locomotive productivity rose by 8%, while fuel efficiency enhanced by 2%, highlighting CP's commitment to operational excellence and sustainability.

CP’s commitment to rewarding its shareholders through dividends amid uncertainties reflects its financial confidence. With dividend payouts increasing from C$507 million in 2021 to C$707 million in 2022 and 2023, its financial growth and proactive approach to rewarding shareholders are underscored. In the third quarter of 2024, the company paid out a quarterly dividend of 19 cents per share to its shareholders.

CP: Key Risks to Watch

Canadian Pacific’s financial stability is challenged by soaring operating expenses and weak liquidity, significantly influencing the company’s bottom line. In the third quarter of 2024, total operating expenses rose by 8.3% year over year. This surge in operating expenses is primarily driven by escalated labor costs.

Weak liquidity does not bode well for CP. Canadian Pacific exited the September-end quarter with a current ratio (a measure of liquidity) of 0.53. A current ratio of more than 1 is always considerable, as a current ratio of less than 1 indicates that the company does not hold sufficient cash to meet its short-term obligations.

Shares of Canadian Pacific have declined 3.9% year to date compared with its industry’s fall of 1.1% in the same period.

Investors interested in Transportation stocks should always be looking to find the best-performing companies in the group. Has United Airlines (UAL) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Transportation sector should help us answer this question.

United Airlines is a member of the Transportation sector. This group includes 135 individual stocks and currently holds a Zacks Sector Rank of #10. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.

The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. United Airlines is currently sporting a Zacks Rank of #2 (Buy).

The Zacks Consensus Estimate for UAL's full-year earnings has moved 6.2% higher within the past quarter. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.

Based on the most recent data, UAL has returned 117.6% so far this year. In comparison, Transportation companies have returned an average of 4.8%. As we can see, United Airlines is performing better than its sector in the calendar year.

One other Transportation stock that has outperformed the sector so far this year is Westinghouse Air Brake Technologies (WAB). The stock is up 56.7% year-to-date.

The consensus estimate for Westinghouse Air Brake Technologies' current year EPS has increased 2% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).

Looking more specifically, United Airlines belongs to the Transportation - Airline industry, which includes 31 individual stocks and currently sits at #14 in the Zacks Industry Rank. Stocks in this group have gained about 35.4% so far this year, so UAL is performing better this group in terms of year-to-date returns.

Westinghouse Air Brake Technologies, however, belongs to the Transportation - Equipment and Leasing industry. Currently, this 9-stock industry is ranked #18. The industry has moved +47.3% so far this year.

Investors with an interest in Transportation stocks should continue to track United Airlines and Westinghouse Air Brake Technologies. These stocks will be looking to continue their solid performance.

Zacks Investment Research

It doesn't matter if you're a growth, value, income, or momentum-focused investor -- building a successful investment portfolio takes skill, research, and a little bit of luck.

But how do you find the right combination of stocks? Funding your retirement, your kids' college tuition, or your short- and long-term savings goals certainly requires significant returns.

Enter the Zacks Rank.

What is the Zacks Rank?

The Zacks Rank, which is a unique, proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, that makes building a winning portfolio easier.

There are four main factors behind the Zacks Rank: Agreement, Magnitude, Upside, and Surprise.

Agreement is the extent to which all brokerage analysts are revising their earnings estimates in the same direction. The greater the percentage of analysts revising their estimates higher, the better chance the stock will outperform.

Magnitude is the size of the recent change in the consensus estimate for the current and next fiscal years.

Upside is the difference between the most accurate estimate, which is calculated by Zacks, and the consensus estimate.

Surprise is made up of a company's last few quarters' earnings per share surprises; companies with a positive earnings surprise are more likely to beat expectations in the future.

Each one of these factors is given a raw score that's recalculated every night, and then compiled into the Zacks Rank. Using this data, stocks are classified into five groups, ranging from "Strong Buy" to "Strong Sell."

The Power of Institutional Investors

The Zacks Rank also allows individual investors, or retail investors, to benefit from the power of institutional investors.

These professionals manage the trillions of dollars invested in hedge funds, mutual funds, and investment banks, and studies have shown that they can and do move the market because of the large amounts of money they invest with. Thus, the market tends to move in the same direction as institutional investors.

In order to determine the fair value of a company and its shares, institutional investors design valuation models that focus on earnings and earnings estimates. Because if you raise earnings estimates, it then creates a higher fair value for a company and its stock price.

With these changes, institutional investors will act, usually buying stocks with rising estimates and selling those with falling estimates. An increase in earnings expectations can potentially lead to higher stock prices and bigger gains for the investor.

Retail investors who get in at the first sign of upward revisions have a distinct advantage over larger investors since it can often take weeks, if not months, for an institutional investor to build a position. They'll also benefit from the expected institutional buying that could follow.

Not only can the Zacks Rank help you take advantage of trends in earnings estimate revisions, but it can also provide a way to get into stocks that are highly sought after by professionals.

How to Invest with the Zacks Rank

The Zacks Rank is known for transforming investment portfolios. In fact, a portfolio of Zacks Rank #1 (Strong Buy) stocks has beaten the market in 26 of the last 32 years, with an average annual return of +25.41%.

Moreover, stocks with a new #1 (Strong Buy) ranking have some of the biggest profit potential, while those that fell to a #4 (Sell) or #5 (Strong Sell) have some of the worst.

Let's take a look at

Westinghouse Air Brake Technologies (WAB)

, which was added to the Zacks Rank #1 list on November 14, 2024.

Westinghouse Air Brake Technologies Corporation provides value-added, technology-based locomotives, equipment, systems and services for the freight rail and passenger transit industries, as well as in the mining, marine and industrial markets, across the globe. WAB's products are intended to enhance safety, improve productivity and reduce maintenance costs for customers. The company's products can be seen on most locomotives, freight cars, passenger transit cars and buses around the globe.

Four analysts revised their earnings estimate higher in the last 60 days for fiscal 2024, while the Zacks Consensus Estimate has increased $0.15 to $7.61 per share. WAB also boasts an average earnings surprise of 9.5%.

Analysts are expecting earnings to grow 28.6% for the current fiscal year, with revenue forecasted to rise 7.5%.

Additionally, WAB has climbed higher over the past four weeks, gaining 4.8%. The S&P 500 is up 3.1% in comparison.

Bottom Line

With a #1 (Strong Buy) ranking, positive trend in earnings estimate revisions, and strong market momentum, Westinghouse Air Brake Technologies should be on investors' shortlist.

If you want even more information on the Zacks Ranks, or one of our many other investing strategies, check out the Zacks Education home page.

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Zacks Investment Research