Follow The Transportation Sector To Profits

Daniel Cross - Contributor - Equities

Certain sectors of the economy have predictive qualities. Known as leading indicators, changes in these industries tell investors whether the economy is expanding or contracting before more solid data comes out.

Transportation is one of those sectors that tells investors how healthy the economy is. When transportation companies are doing poorly and missing earnings, it's often a sign that the economy isn't doing well. On the other hand, when profits are up it can mean that businesses are shipping and manufacturing more goods that need to be delivered.

After a rough start to the year, the transportation sector has rebounded strongly. Just tracking the SPDR S&P Transportation ETF (PACF:XTN) since it dipped in January shows an improvement of 17% to date. Hedge funds have also been expressing an interest in transportation stocks lately with large purchases in a number of trucking companies. Continue reading "Follow The Transportation Sector To Profits"