11 Best Freight Stocks To Buy Now

6. XPO, Inc. (NYSE:XPO)

Number of Hedge Fund Holders: 47

XPO, Inc. (NYSE:XPO) is one of the best freight stocks to buy now. The company is a leading asset-based less-than-truckload freight transportation company based in North America. The company has more than 13,000 drivers and over 43,000 tractors and trailers to meet the shipping needs of 99% of US ZIP codes. In 2023, the company added more than more than 1,400 tractors and produced over 6,400 trailers.

At the close of the first quarter of 2024, 47 investors held stakes in XPO, Inc. (NYSE:XPO), with consolidated positions worth $3.33 billion. Of those, Farhad Nanji and Micheal Demichele’s MFN Partners was the largest investor, with a position worth $1.55 billion.

To improve safety, the company plans to include a freight airbag system expected to be completed by mid-2024. Sites with airbags have witnessed a decline in damage frequency by 20%. The company also rolled out new tractors and trailers capable of improving the company’s fleet maintenance. XPO, Inc. (NYSE:XPO) also delivered a growth in yield, excluding fuel, by almost 10% year-over-year, helping the company improve its adjusted operating ratio by 400 basis points. In 2024, the company expects to increase the number of miles brought in-house, to improve efficiency, flexibility, and quality control.

By the end of 2024, XPO, Inc. (NYSE:XPO) will have a few hundred 100 sleeper trucks fully functional for use. Its volume growth is expected to surpass the company’s headspace count providing a large margin opportunity. On May 3, the company reported market-beating earnings for the fiscal first quarter of 2024. The company logged revenue worth $2.02 billion, up by almost 6% year-over-year, ahead of market consensus by $13.52 million. The company also reported earnings per share of $0.81, beating estimates by $0.13. The company grew its earnings by over 25% over the past 12 months and analysts project earnings to expand by almost 30% over the next five years.

Here are some comments from ClearBridge Investments in its Q3 2023 Investor Letter:

“Our holdings in the industrials sector also contributed during the quarter. XPO, Inc. (NYSE:XPO), which provides freight transportation services internationally, rallied on the news that industry competitor Yellow had filed for bankruptcy, resulting in market share gains for XPO.”