10 Best Transportation Stocks to Buy According to Hedge Funds

8. CSX Corporation (NASDAQ:CSX)

Number of Hedge Fund Investors: 63

Market Capitalization as of February 22: $62.29 billion

CSX Corporation (NASDAQ:CSX) is an American transportation corporation that focuses on railroad operations. Hunter Harrison, the railroad turnaround legend, managed Eastern Class I railroad CSX from early 2017 until his death in December of the same year. Harrison’s replacement, James Foote (who retired in late 2022), was familiar with Harrison’s precision scheduled railroading methodology from his years at Canadian National. PSR’s major focus is on rightsizing assets such as real estate, sorting yards, motive power, and rolling stock. Fewer assets and longer trains increase network fluidity, resulting in increased labor productivity, improved service levels, and higher potential additional operating margins. Better service also opens up more potential for multimodal transportation, which is extremely competitive with trucks. The company’s intermodal traffic is facing near-term headwinds from depressed pricing in the competitive full truckload market, but this pressure is easing, and the company continues to see intermodal as a key long-term growth prospect.

CSX Corporation (NASDAQ:CSX) recorded a 2% volume gain for the year, outpacing the larger industrial economy, with intermodal volume up 4% YoY in Q4 2024. Despite headwinds from lower fuel surcharges and softening metals markets, the company’s merchandise segment increased revenue by 3%. Customer satisfaction increased, as evidenced by its highest-ever Net Promoter Score in Q4. Furthermore, the Howard Street Tunnel project was shortened from three years to 6-8 months to improve operating efficiency.

The stock has risen by 0.44% year to date, making it one of the Best Transportation Stocks. Analysts remain optimistic about the company’s future, pointing out that domestic shipments account for a sizable amount of CSX Corporation (NASDAQ:CSX)’s income. They believe that the company’s domestic activities will develop as firms increasingly attempt to obtain products from within the United States rather than relying on international manufacturers.