We recently compiled a list of the 11 Best Logistics Stocks to Invest in Right Now. In this article, we are going to take a look at where J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) stands against the other logistics stocks.
The Logistics Industry: Current Dynamics
Logistics companies transporting goods around the world continue to navigate uncertainty as Donald Trump plans to impose 60% tariffs on goods from China and 25% tariffs on goods from Mexico and Canada. As reported by CNBC, Dave Bozeman, the new CEO of C.H. Robinson, sees an opportunity in Trump tariffs. The logistics giant is a top 3 carrier on the China-U.S. freight lane also carrying nearly 10% of the freight on the US-Mexico lane. Citi transportation analyst Ari Rosa considers the company’s business diversified enough to work through tariffs despite its global forwarding business being very exposed to China. The CEO’s stance on the tariffs was quite positive as well, as he stated:
“The freight still has to move. It might just move at a different starting point, and we would still be there to move that.”
In an interview with CNBC, Ravi Jakhar of the firm Allcargo Group, the world’s LCL consolidation leader and India’s largest integrated logistics solutions provider, reiterated optimism regarding the Trump tariff risks. He mentioned how over 4 years ago when sanctions came in from the Trump administration, the firm saw an increased import into its Vietnam offices from China and improved export out of Vietnam, alongside increased momentum in Indonesia and the Philippines. In his opinion, whether it is a short-term tariff sanction or a long-term structural trend, trade flows could change in terms of origins and destinations but the overall trade flows would remain robust as long as manufacturing and consumption are there.
As of what’s recent in the logistics landscape, the holiday season is in full swing, with holiday surcharges playing a crucial role in profitability for logistics companies since they charge their big retail customers extra fees on a per-package basis compared to their June volume during the busy holiday season. The increase in e-commerce is also benefitting such logistics providers and full truckload carriers. Simultaneously, an increase in freight in anticipation of future tariffs is also being seen.
A survey from Merchants Fleet and Atomik Research of decision-makers in organizations that typically transport freights of consumer-packaged goods throughout the US revealed that 88% saw AI as useful in alleviating pressures on their fleets this peak delivery season. AI’s data-driven capabilities are to streamline operations and decision-making, with the majority of the respondents citing supply chain optimization as a primary benefit. Other advantages mentioned were improved route optimization, enhanced inventory management, and reduced downtime by identifying maintenance issues with fleet vehicles.
Our Methodology:
In order to compile a list of the 11 best logistics stocks to invest in right now, we went through stock screeners, ETFs, and media reports to make a list of relevant stocks. Moving on, we shortlisted the top 11 stocks from our list which had the highest number of hedge fund holders. The 11 best logistics stocks to invest in right now have been arranged in ascending order of their hedge fund holders as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A truck on a highway, its exhausts billowing in the air.
J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT)
Number of Hedge Funds: 39
J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is a Fortune 500 company with a strong vision of creating the most efficient transportation network in North America. The firm offers a range of freight transportation services to customers throughout the US, Canada, and Mexico. It operates through five segments including Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS), Final Mile Services (FMS), and Truckload (JBT).
While J.B. Hunt Transport Services has grown into an industry-leading transportation company, it started off with a handful of trucks back in 1961 in the US. It has lived an over 60-year legacy as a leader in the transportation and logistics industry. The company now has the ability to meet the unique shipping needs of any business, being powered by one of the biggest company-owned fleets in the country and third-party capacity through its J.B. Hunt 360° digital freight marketplace.
The company has distinct and complimentary businesses which are well-positioned. While Intermodal (JBI) boasts the largest drayage fleet in North America, Final Mile Services has the largest final mile asset network in the United States, and Truckload (JBT) has one of the largest capacity networks in North America.
During the third quarter of 2024, the firm saw a 3% year-over-year decline in operating revenue, driven by a 5% and 6% decrease in gross revenue per load in Intermodal (JBI) and Truckload (JBT), respectively, a decline in load volume of 10% and 6% in Integrated Capacity Solutions (ICS) and Dedicated Contract Services (DCS) respectively, and 6% fewer stops in Final Mile Services (FMS). This was offset by JBI load growth of 5% and a 3% rise in revenue per load in ICS.
Overall JBHT ranks 7th on our list of the best logistics stocks to invest in right now. While we acknowledge the potential of JBHT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than JBHT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.