“Revenues and earnings have been in an uptrend for the road & rail industry, in part due to slow but meaningful economic growth in North America. Corridore thinks railroads, such as Union Pacific (UNP), may see volumes and pricing benefit from improved transportation demand, continued growth in petroleum shipping by rail, stabilization in coal volumes and pricing, and steady growth in the shipping of most other commodities,” according to S&P Capital IQ.
Even with the potential for railroad stocks to rebound, investors need to be mindful of rising oil prices and the impact on airlines. Airlines account for 24.2% and 16.1%, respectively, of XTN and IYT. That is to say it is not a coincidence that those two ETFs are off an average of 4.7% while USO is higher by more than 20% over the past month.
iShares Transportation Average ETF
