| Where there is a problem, we can find major profits in the solution. And finding profitable solutions is what the competitive market economy does best. The broken supply chain is a massive problem. You can see it in rising prices, longer delivery times, empty car lots and depleted store shelves. Every link in the supply chain, from the factories in Asia to the last-mile delivery in Kansas, is under pressure. But the biggest bottlenecks are in transportation, and we see that in the pricing. As an example, the cost to transport a container from China to the U.S. West Coast is up about 120% in the past 12 months. So, with that as background, let’s take a look at the SPDR S&P Transportation ETF (NYSE: XTN). I like to buy shares of individual companies. But you take a broader approach with an exchange-traded fund (ETF) — a basket of stocks. And that makes plenty of sense here. The transportation sector is benefiting from higher costs. But let’s look under the hood to see what stocks XTN owns.
| Elon Musk and Tesla still have one BIG PROBLEM that could derail the whole electric vehicle market. No, it's not lithium. It's another resource that's even more critical for electric vehicles. And right now there's one tiny $4 stock that is uniquely set up to benefit from this booming demand. | |
ETF X-Ray of XTN Our approach in my premium stock research service Green Zone Fortunes is quantitative. We put every stock we recommend through a rigorous six-factor rating system. My proprietary Green Zone Ratings system then assigns a rating of zero to 100, making it easier to spot the best of the best stocks. So, let's do an ETF X-ray to see how XTN's holdings stand up in my system. Here are the top 20 stocks in XTN by weight (percent of total portfolio):  (Click here to view a larger image ) These stocks make up about 50% of the ETF’s market cap. I’d avoid some of these companies — ride-hailing service Uber Technologies Inc. (Nasdaq: UBER) rates a 6, which makes it “High-Risk” in my Green Zone Ratings system. But as you can see, most of the stocks in the table above rate above 60, making them “Bullish” in our system. Several even rate above 80, making them “Strong Bullish.” Based on our historical research, Strong Bullish stocks should beat the market by three times over the following 12 months. So, in buying shares of XTN, you get a basket of highly-rated transportation stocks that should enjoy several strong quarters as the supply-chain logjam works itself out.
| Only 2% of cars sold in the U.S. today are electric vehicles … but that's about to change — FAST. A new battery breakthrough is ready to hit the market. It could revolutionize the $2 trillion automotive industry … and could soon make gas guzzlers obsolete. This technology is predicted to cause a 1,500% surge in electric vehicle sales over the next four years. The company pioneering this new battery could be the investment of a lifetime. | |
X-Ray Reveals Top Transportation Stock Let’s pick one off the top. ArcBest Corp. (Nasdaq: ARCB) is the second-largest position in XTN’s portfolio, with an allocation of about 3%. It also rates near perfect in Green Zone Ratings at 99 out of 100. ArcBest, a trucking and logistics company based in Arkansas, rates well across five of six factors. (The lone exception is size, in which ArcBest rates in the middle of the pack.) This is an inexpensive, high-quality and low-volatility stock. ARCB’s underlying business exhibits strong growth that pushes the stock price higher. There’s nothing to dislike here. And XTN is full of highly-rated stocks like these. Find More Hidden Stock Gems Let’s dig even deeper and look at the highest-rated stocks within XTN:  (Click here to view a larger image) You can see the overlap between stocks that rate well and hold a larger position within XTN’s portfolio: ArcBest, Saia Inc. (Nasdaq: SAIA) and Old Dominion Freight Lines (Nasdaq: ODFL), just to name a few. But some companies on this second list are underweighted in XTN. They fly under the radar of most investors. This is where I focus my research in Green Zone Fortunes. This month, I recommended a new stock for the Green Zone Fortunes model portfolio. It’s a high-quality stock within XTN that rates in the top 5% of 8,000 stocks within our universe on growth, quality and value. It‘s also in a prime position to help fix the supply chain mess. And you can find out more about this company by joining Green Zone Fortunes today. For less than $4 per month, you’ll receive my highest-conviction stock recommendations, along with guidance on the best times to buy and sell. These are the stocks within today’s mega trends that I believe will crush the market over the next six months to three years. Click here for details on how to join now. You’ll learn about my No. 1 stock mega trend for the next decade. It’s a technology I call “Imperium,” and I’m confident the underlying stock will be bigger than Intel was in the ‘90s — when its stock shot up over 8,000%! Join us today! 
Adam O'Dell
Chief investment strategist, Money & Markets
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1963: The Beatles released "I Want to Hold Your Hand" in the United Kingdom. It would have been an instant chart-topper had it not been blocked by the group's previous single, "She Loves You." | |
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