10 Best Long-term Penny Stocks to Buy Now

6. Custom Truck One Source, Inc. (NYSE:CTOS)

Share Price as of July 18: $4.80

Number of Hedge Fund Holders: 13

Custom Truck One Source, Inc. (NYSE:CTOS) is a Missouri-based provider of specialty equipment and services for infrastructure-focused end markets. It runs through three segments, Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS). The company provides a range of services, including sales, rentals, customization, remanufacturing, maintenance, and disposal of commercial trucks and heavy equipment.

The company offers trucks, whether new or pre-owned, that are customized to meet clients’ precise needs. It also offers flexible financing solutions, making it possible for businesses of various sizes to acquire necessary equipment without substantial initial expenses. Furthermore, Custom Truck One Source (NYSE:CTOS) provides ongoing support throughout the equipment’s lifespan, including maintenance and repair services. The company has a strong focus on transmission and construction projects and offers its services and products to utility, telecom, and construction companies working on transmission line projects, grid modernization, and other infrastructure initiatives.

Custom Truck One Source (NYSE:CTOS) has made strategic advancements over the past year to meet the robust demand in the equipment rental and sales sector. The company’s proactive approach includes a substantial investment in inventory, which is responsible for the fulfillment of customer orders and rental needs across a wide range of products. In Q1 2024, the company’s TES segment saw revenue rise by 14.7% to $239.9 million from $209.2 million in Q1 2023.

The growth was mainly due to improved inventory management following supply chain enhancements in 2023. High backlog levels also boosted production and delivery capabilities during Q1 2024. By strategically building inventory throughout 2023 and into 2024, the company is well-positioned to meet its production, fleet expansion, and sales goals for 2024 and the future.

Additionally, the company has expanded its presence in key geographic markets with recent branch openings in Casa Grande, Arizona, Sacramento, California, and Salt Lake City, Utah. This expansion is aimed at enhancing service accessibility and market penetration in previously underserved regions. By bolstering its footprint, the company not only strengthens its market position but also enhances its ability to deliver tailored solutions and rapid support to regional customers.

In Q1, 13 hedge funds held stakes in Custom Truck One Source (NYSE:CTOS), with positions worth $26 million.