WASHINGTON – With fuel prices stabilizing and manufacturing showing signs of recovery, transportation and freight companies have attracted investors. Since a mid-March low, transportation stocks in the S&P 500 have nearly kept pace with the 24% rise in the overall index.

So are there bargains left among the transports? We scanned the Multex database and found a few stocks that still look reasonable. Our criteria: price-to-sales and price-to-book multiples below five-year averages; latest 12-month sales of $400 million or greater; three-year revenue growth (annualized) in positive territory; and estimated annual earnings growth of 10% or better over the next three to five years.

Our screens snared a few passenger airlines, but we left out those more speculative bets in favor of air freight couriers, railroads and truckers. John Escario, manager of the Rydex Transportation Fund, thinks the latter group is particularly well-poised to benefit from an eventual economic recovery. “They’ve had to go through a lot of pain,” he says, noting that some 7,000 trucking outfits have gone bust since 2001. Result: less capacity, steadier prices and better cost control for the survivors.

Full story at Forbes.com

Over the past year, consolidation among companies providing technology services to the federal government has been brisk, to put it mildly. “Unprecedented,” says David Heinemann, head of the Strategic Advisory Services Group at Input, a Reston, Va.-based market research firm.

In the first quarter of this year, Input tallied 18 merger or acquisition transactions among tech outfits selling expertise to the federal government. And the deals just keep coming. In late May, Fairfax, Va.-based Anteon International completed its $91 million purchase of Information Spectrum, a provider of identification card technology. Shortly thereafter, General Dynamics offered to buy Veridian, a network security engineering firm headquartered in Arlington, Va., for $1.5 billion.

All this deal-making is driven by the $45 billion that Uncle Sam spends each year on vendor-furnished information systems and services, a number expected to grow 8.5% annually over the coming five fiscal years. Input projects that by 2008, 87% of federal technology spending will get contracted out.

Both the growth prospects for the business and the consolidation frenzy have attracted investors. Anteon, for instance, trades just a hair off its 52-week high. In fact, some of these stocks have done so well, that some market watchers are nervous. For example, last month The Washington Post columnist Steven Pearlstein warned of a “Beltway Bubble About To Burst.”

Time to sell? Anteon Chief Executive Joseph Kampf, for his part, doesn’t sound alarmed. “There’s more consolidation to be had,” he says, pointing out that there are 3,000 companies in this marketplace, and even the largest players in the field hold market share numbers in the single digits.

Full story at Forbes.com