Piper Jaffray Recommends FDX, HUBG, JBHT, UPS, And WERN To Investors "Looking To Play A Rallying Transport Recovery"

Piper Jaffray said that its initial transportation and logistics channel checks suggest 1Q11 demand has accelerated even despite inclement weather, “with March off to a very strong start.”

“Given demand pick up capacity has tightened meaningfully with carriers we believe getting upside price in negotiating 2011 contractual rates, in the mid to high single digits in some instances, and aggregate TL industry yields now likely trending above consensus expectations,” Piper Jaffray writes.

“Week 9 Class I US rail intermodal vol growth slowed to 1.0% y-o-y, likely due to the timing of Chinese New Year. US domestic airfreight remains weak while international appears to be solid, after adjusting for the Chinese New Year noise.

“Investors looking to play a rallying Transport recovery should own FedEx Corporation (NYSE: FDX), Hub Group Inc. (NASDAQ: HUBG), JB Hunt Transport Services Inc. (NASDAQ: JBHT), United Parcel Service, Inc. (NYSE: UPS), and Werner Enterprises Inc. (NASDAQ: WERN) (all Overweight rated).”

FedEx Corporation closed Thursday at $89.95; Hub Group closed at $34.31; JB Hunt Transport Services closed at $42.72; Werner Enterprises closed at $25.11; and United Parcel Service closed at $73.11.