Transportation is a growing sector and one that has seen a strong performance as of late.  As a matter of fact, iShares Transportation Average ETF under the ticker (IYT - ETF report) has soared almost 30% in the last 52 weeks. 

While this is certainly a strong performance, let’s narrow it down and focus on some of the most undervalued companies in the broader (and global) transportation and transportation-related manufacturing sectors. In particular, we have highlighted 3 high quality auto industry stocks that each have PEGs well below 1. 

This valuation suggests that the three stocks are trading at reasonable levels considering their current growth outlooks. And best of all, each member of the trio highlighted below has seen rising earnings estimates too, suggesting that any one could be a solid choice for investors:

Tata Motors (TTM)

Tata is an international car company which is also India’s leading auto manufacturer by a long shot.  Being the biggest auto company in a country with a population of well over a billion people is a big deal.  Tata has a strong possibility of continuing to grow, since India is projected to be the leading country in the world for future population growth, while its middle class is surging as well.

TTM currently has a Zacks Rank #1 (Strong Buy).  It also has a nice PEG of 0.61.  As previously mentioned, such a low PEG suggests that the stock is trading at a price that is exceedingly low compared to the growth rate that the company experiences.  (TTM - Snapshot Report) has had a positive consensus EPS revision for the fiscal year of 7.92% in the last 4 weeks.  Earlier this month, Tata reported EPS of $0.94 for the fourth quarter.

Wabash National Corporation (WNC)

Wabash National Corporation is among the leading manufacturers of semi trailers in North America.  It is worth noting that the company does business with two subsidiaries that it owns, which are Transcraft Corporation and Wabash National Trailer Centers. 

WNC, like all the stocks in this article, holds a Zacks Rank #1 (Strong Buy).  The company has a PE of 12.88, and also has a PEG ratio of 0.6.  Wabash stands among the top 20%, with a Zacks Industry Rank of 53.  (WNC - Snapshot Report) posted an EPS surprise in the fourth quarter, beating our consensus estimate by 12.5%. 

The company has been building momentum, with our consensus estimate being revised as early as 7 days ago, with a current EPS consensus estimate of $0.17.  There have been 8 positive earnings estimate revisions by analysts in the last 60 days, with only one negative earnings estimate revision by an analyst in the last 60 days.

Allison Transmission Holdings Inc (ALSN)

Allison Transmission Holdings Inc. focuses on manufacturing fully automatic transmissions for commercial vehicles, US military vehicles, as well as hybrid propulsion systems for transit buses. 

The company is a Zacks Rank #1, with a PEG of 0.87.  The company has had a major revision in the last four weeks, seeing the consensus EPS increasing for the fiscal year by a whopping 86.06% since then!  (ALSN - Snapshot Report) operates in a space similar to Wabash WNC, so it also has a Zacks Industry rank of 53/265.  It helps that the stock is doling out a dividend of 1.87%.

Allison has posted massive surprises in each of the last four quarters, beating our EPS consensus by an average of 80.51% each quarter.  The company posted a positive EPS surprise of 116.67% when it reported its earnings earlier this month.