In this article, we will take a detailed look at the best freight stocks to buy according to hedge funds.
Freight stocks are often perceived as boring if compared to the flashy technology and AI stocks, but they are actually the blood of the global economy – the freight sector is the backbone of trade and the gross domestic product of every country. In essence, any good produced and sold was almost certain to have been involved in transportation, often several times at different stages of the supply chain. This means that freight companies are able to capture a small share of the giant gross domestic product, which makes the overall sector a huge size.
The key growth drivers of freight activity are trade volumes, fuel prices (cheap fuel is a huge profitability boost), public spending on large projects like infrastructure, and the level of manufacturing activity. Consequently, freight stocks thrive during periods of strong economic growth, supported by affordable energy prices and low interest rates, as well as a calm geopolitical landscape that ensures the free flow of goods. Conversely, the whole transportation sector tends to underperform during sluggish economic conditions, featuring mediocre construction and manufacturing activities, slowdowns in both public and private spending, and other macro headwinds like high interest rates and inflation, which pressure consumption on a large scale.
READ ALSO: 10 Best Transportation Stocks to Buy According to Hedge Funds
The year 2024 was not the best for freight activity in the US, as almost 2 years of high interest rates and past inflation finally took a toll on consumption, industrial activity, and construction. Last year, while strong from a valuation standpoint and stock market returns, it actually brought a significant slowdown in consumer spending, residential construction, automotive volumes, and industrial production. There were pockets of strength in data center construction, public construction (as fueled by the Infrastructure Act), and some industrial niches, but that was not enough to fuel growth for freight stocks. As a result, the whole sector underperformed the broad market and reached a new 5-year low (relative to the broad market) by year-end. Furthermore, the new US administration brought even more challenges into 2025 – the cut in public spending is likely to eliminate some of the pockets of strength mentioned above, while the tariff threats are a huge headwind for commerce and the flow of goods.
The Atlanta Fed and other reputable research boutiques have drastically cut their estimates of GDP growth for 2025, which puts transportation stocks out of favor again. However, according to the principles of value investing, the trough of the business cycle, when stocks are trading at or near their lows, is the best time to acquire good companies at exceptional prices. As legendary investors like Warren Buffet and Peter Lynch have taught us, valuations certainly do matter for long-term stock returns, meaning that periods of underperformance are opportunities to acquire stocks at bargain prices.
We also believe that the long-term picture remains favorable, and there are reasons to expect a reacceleration in GDP growth and freight volumes at some point in 2H 2025 or 2026, once the current challenges are navigated. The main reason for long-term optimism is that the outlook on the construction sector is favorable due to a chronically undersupplied residential housing market and the aging of infrastructure in the US. Second, industrial activity will also have to rebound at some point, and we believe that lower interest rates over time will unmute the “Roaring 2020s” tailwinds in such areas as electric vehicle production, energy grid, and automation – all of these will bring higher volumes for the freight sector. The key takeaway for readers is that we may be at an opportune time to acquire freight stocks at bargain prices ahead of a broad economic recovery over the next 1-2 years.
A view of an open cargo shipping yard, highlighting the companies freight listing services.
Our Methodology
We used a stock screener and thematic ETFs to shortlist 40-50 companies operating in the freight space, which includes the “Integrated Freight & Logistics” and “Trucking” industries. Then we compared the list with our proprietary database of hedge funds’ ownership and included in the article the top 12 stocks with the largest number of hedge funds owning the stock as of Q4 2024. All stocks are ranked in ascending order.
Why are we interested in 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12. Landstar System, Inc. (NASDAQ:LSTR)
Number of Hedge Fund Holders: 29
Landstar System, Inc. (NASDAQ:LSTR) is a non-asset-based provider of integrated transportation management solutions operating across the United States, Canada, Mexico, and internationally. The company delivers services through a network of independent commission sales agents and third-party capacity providers. LSTR offers a range of transportation services, including truckload, less-than-truckload, intermodal, air, and ocean freight, utilizing various equipment types such as dry vans, flatbeds, and temperature-controlled trailers. The company’s asset-light model enables flexibility and scalability in meeting diverse customer needs across multiple industries.
Landstar System, Inc. (NASDAQ:LSTR) delivered exceptional revenue performance in Q4 2024, with results slightly ahead of the midpoint of guidance, despite a challenging freight environment characterized by soft demand and readily available truck capacity. The company achieved record heavy haul revenue performance during the fiscal year 2024, driven by a 9% increase in heavy haul revenue per load and a 3% increase in heavy haul volume. The Q4 also saw a 3.1% increase in overall truck revenue per load compared to the prior year, primarily attributable to an 8% increase in unsided/platform revenue per load.
Looking ahead, while the freight environment remains challenging, Landstar System, Inc. (NASDAQ:LSTR) maintains a strong balance sheet and continues to generate significant free cash flow through its variable-cost business model. The company expects the business environment to remain challenging throughout the first half of 2025, though it remains focused on executing strategic initiatives and positioning for future growth when market conditions improve. Management deployed over $82 million toward stock buybacks in the fiscal 2024 and declared a $2 per share special dividend in Q4. With such an outstanding capital allocation strategy and a strong balance sheet, LSTR is one of the best freight stocks to own ahead of a potential recovery in transportation activity.
11. Saia, Inc. (NASDAQ:SAIA)
Number of Hedge Fund Holders: 31
Saia, Inc. (NASDAQ:SAIA) is a transportation company specializing in less-than-truckload (LTL) services across the United States. The company offers regional and inter-regional LTL transportation, non-asset truckload services, and third-party logistics solutions. SAIA’s network includes numerous terminals nationwide, facilitating direct service within the contiguous US and extending to Alaska, Hawaii, Puerto Rico, Canada, and Mexico via partnerships.
Saia, Inc. (NASDAQ:SAIA) achieved record performance in 2024, crossing $3 billion in revenue and delivering nearly 9 million shipments during its 100th year of operations. The company significantly expanded its network by opening 21 new terminals and relocating 9 terminals in 2024, ending the year with 214 terminals and establishing a national footprint serving the 48 contiguous states. The Q4 revenue reached $789 million, a 5% increase YoY, with shipments per workday up 4.5% and revenue per shipment, excluding fuel surcharge, increasing 1.3%.
Looking ahead, Saia, Inc. (NASDAQ:SAIA) plans to invest over $700 million in Capex for 2025, including additional relocations, upgrades, and the opening of 5-6 new facilities. While new terminal openings initially impact margins, management expects an 80 to 100 basis point improvement in the operating ratio for the full year 2025. The company’s focus remains on pricing optimization, mix management, and leveraging its expanded national network to create long-term value for customers and shareholders. Notably, about three-quarters of the company’s current growth is coming from terminals opened in 2024, demonstrating strong customer acceptance in new markets. With significant reinvestments into the business, SAIA is well positioned to boost its growth potential, which makes it one of the best freight stocks to consider buying.
10. Knight-Swift Transportation Holdings Inc. (NYSE:KNX)
Number of Hedge Fund Holders: 32
Knight-Swift Transportation Holdings Inc. (NYSE:KNX) is a leading freight transportation company operating in North America. The company offers a broad range of services, including general, dedicated, and cross-border truckload transportation across the US, Mexico, and Canada. It also uses temperature-controlled, flatbed, and specialized trailers if needed, rail intermodal, freight brokerage, and other logistics management solutions. KNX ranked 7th on our recent list of 9 Best Trucking Stocks To Buy.
Knight-Swift Transportation Holdings Inc. (NYSE:KNX) is showing signs of moving past the prolonged down cycle that affected the freight transportation sector for nearly 3 years, with 2024 bringing stabilization in pricing, return of seasonal patterns, and cooling of cost inflation. The company has strategically deployed capital through acquisitions to create more growth runway and margin improvement in both Truckload and LTL segments while trimming costs and developing technologies to enhance business efficiency. The Q4 2024 showed the benefits of their diversified business model as sequential improvements in the Truckload and Logistics segments offset seasonal slowdown in other segments and cost headwinds from LTL expansion.
Looking ahead to 2025, Knight-Swift Transportation Holdings Inc. (NYSE:KNX) expects to leverage its scale and suite of services in Truckload operations to enhance its value proposition while focusing on growing shipment count in LTL to drive margin expansion through revenue growth and operational efficiency. The company’s guidance reflects expectations for gradual recovery in market conditions throughout 2025. Management anticipates improvements in contractual pricing through bid activity and expects seasonal improvement in volumes and utilization to lift earnings in the second quarter. At least 32 hedge funds owned KNX as per Insider Monkey’s database of Q4 2024, which makes it one of the best freight stocks according to hedge funds.
9. Expeditors International of Washington, Inc. (NYSE:EXPD)
Number of Hedge Fund Holders: 35
Expeditors International of Washington, Inc. (NYSE:EXPD) provides a full suite of global logistics services to help customers strategically move goods. The company operates under a third-party logistics model – they purchase cargo space from carriers (such as airlines, ocean shipping lines, and trucking lines) and resell that space to their customers. EXPD also provides customs brokerage, order management, storage, warehousing and distribution, transit that involves temperature controls, insurance for freight operations, and other auxiliary services.
Expeditors International of Washington, Inc. (NYSE:EXPD) demonstrated strong financial performance in Q4 2024, with diluted EPS increasing 54% YoY. The company achieved significant revenue growth of 30% to $3.0 billion, driven by increased airfreight tonnage of 11% and ocean container volume growth of 14%. The strong performance was attributed to high demand from Asia, substantial e-commerce business, and increased demand for technology products, amid limited air capacity. Ocean capacity was impacted by front-loading due to potential port labor actions and longer transit times as carriers avoided the Red Sea.
However, Expeditors International of Washington, Inc. (NYSE:EXPD) also faced challenges, including rising labor costs and inflationary pressures. Looking ahead, management remains focused on strategic initiatives to drive growth, including expanding its customs brokerage offering in Asia and enhancing its technology capabilities. Once the short-term headwinds are navigated, EXPD is well-positioned to capitalize on the economic growth expected for the rest of the “Roaring 2020s” as the company’s full-suite business model allows it to capture opportunities at all levels and minimize its sensitivity to the economic cycles. EXPD has outperformed the broad market since the beginning of the year, which makes it one of the best freight stocks to buy now.
8. C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW)
Number of Hedge Fund Holders: 35
C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) is a Minnesota-based third-party logistics (3PL) company that provides a diversified base of transportation services, including LTL, truckload, air, ocean shipping, and intermodal. The company’s main competitive advantage is its wide network of carriers as well as its proprietary technology platform (Navisphere), which facilitates supply chain management and visibility for clients. Besides that, CHRW also operates a subsidiary that specializes in sourcing and distribution of fresh food products to retail and food service customers.
C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) is navigating a prolonged freight recession, with the current downturn lasting 37 months in an industry that typically experiences 18-24 month cycles. Despite this challenging environment, the company remains committed to its previously outlined strategic plan until 2026. The good news is that CHRW’s asset-light model provides flexibility and agility to deal with market fluctuations, while its strategy allows the company to outperform the market in volume regardless of market conditions. The company has also implemented a new operating model that has driven significant productivity improvements, with a 15% increase in productivity achieved in both 2023 and 2024.
C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) has demonstrated success in decoupling headcount growth from volume growth in its Global Forwarding business, growing revenue while reducing headcount by 10% and generating more than 15% productivity in 2024. The company expects to replicate this success in its North American Surface Transportation business, leveraging its advanced technology stack and improved processes. Management has committed to generating mid-30% operating margins at the enterprise level during mid-cycle conditions, significantly above the current levels. With strong guidance in place, CHRW is one of the best freight stocks to consider.
7. Forward Air Corporation (NASDAQ:FWRD)
Number of Hedge Fund Holders: 37
Forward Air Corporation (NASDAQ:FWRD) is a global leader in asset-light transportation services, operating across the Americas, Europe, and Asia. The company provides LTL, truckload, freight brokerage, and supply chain services to a diverse range of customers in high growth end markets. FWRD also offers premium services that require precise execution and tight deadlines – special handling, expedited transit, and rapid deliveries of strategic loads. The asset-light strategy is aimed at minimizing investments in equipment and facilities, thus reducing CapEx requirements and making the company more efficient.
Forward Air Corporation (NASDAQ:FWRD) reported a consolidated EBITDA of $308 million for 2024, reaching the upper end of their guidance range, which was facilitated by the successful execution of more than $100 million in annualized savings from synergies and cost-out actions while maintaining high customer satisfaction levels. The Q4 2024 performance was driven by consistent results in the Intermodal segment and strong performance from the Omni Logistics segment, which achieved its best quarterly reported EBITDA since the transaction. However, the Expedited Freight segment faced challenges due to decreased volumes and a pricing strategy that prioritized growth over profitability.
Looking ahead, Forward Air Corporation (NASDAQ:FWRD) is transitioning from integration to transformation, focusing on IT systems rationalization, data quality improvement, and establishing a global shared services organization. The transformation efforts, which will continue into 2026, include consolidating multiple ERP systems into a unified IT network to reduce redundancies and enhance efficiencies. Management believes the company is in a good place with legacy customers and continues to service them extremely well. With 37 hedge funds owning the stock, FWRD ranks 7th on our list of best freight stocks.
6. XPO, Inc. (NYSE:XPO)
Number of Hedge Fund Holders: 45
XPO, Inc. (NYSE:XPO) is a transportation company that follows a more specialized strategy. It primarily provides Less-Than-Truckload operations in North America but has some transportation activity in Europe as well. With over three decades of experience, XPO leverages its own proprietary technology, such as data science and machine learning algorithms, to optimize efficiency and enhance execution for its clients. Over time, the company has grown into one of the market leaders in the US, with more than 8% reported market share in LTL.
XPO, Inc. (NYSE:XPO) delivered strong results in the recent Q4 2024 with YoY earnings growth and LTL margin expansion that outperformed the industry. For the full year 2024, the company grew revenue by 4% to a record $8.1 billion, generated $1.3 billion of adjusted EBITDA, representing a 27% increase from the prior year, and delivered a 31% increase in adjusted diluted EPS. XPO successfully integrated 25 new service centers into their network, establishing a major competitive advantage in customer service capacity. The company improved operational efficiency significantly, reducing outsourced miles to historic lows and achieving a damage claims ratio of 0.2%, marking an improvement from 0.3% the previous year.
Looking ahead, XPO, Inc. (NYSE:XPO) expects to deliver significant margin expansion and earnings growth in 2025, with a baseline expectation of 150 basis points of margin improvement for the full year. The company currently maintains nearly 30% excess door capacity and a robust fleet in the trough of the cycle, positioning them strongly for accelerated operating leverage and profitable growth in the freight market up-cycle. With a lower Capex profile and sustained earnings growth expected, XPO anticipates generating higher levels of free cash flow, providing greater flexibility to return capital to shareholders over time. The strong guidance for the future and flawless execution from management make XPO one of the best freight stocks to invest in.
5. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT)
Number of Hedge Fund Holders: 47
J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is a transportation company that offers a diversified range of services, ranging from truckload shipping and intermodal transport to auxiliary solutions like dedicated contract services and final mile services. JBHT uses its own innovative technology platform (J. B. Hunt 360) to make its operations more transparent and help clients manage some of the processes themselves. The company is also known for continuous innovation and reinvestments into its operations to remain competitive and meet the evolving needs of its clients.
J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) delivered strong operational performance in 2024 despite challenging market conditions, with particular success in service execution and safety performance. The company achieved record Intermodal volumes for two consecutive quarters while maintaining high service levels, demonstrating operational excellence during peak season. The Dedicated Contract Services business showed remarkable resilience with solid visibility for future growth, though some fleet losses are expected to continue through early Q2 2025. Financial results for Q4 2024 showed revenue declining 5% YoY, while operating income increased 2%, and diluted EPS increased 4%.
Looking ahead to 2025, J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) faces continued inflationary cost pressures in insurance premiums and people costs, despite record safety performance. Management is focused on improving margins and returns on capital, with a clear strategy to scale into their investments and grow the business. The company’s strategic investments, including the acquisition of Walmart’s Intermodal assets, are expected to enhance future earnings potential. Capital expenditures for 2025 are projected between $700 million and $900 million, up from $674 million in 2024, reflecting the company’s commitment to growth. We include JBHT on our list of best freight stocks as its strong reinvestments into the business position the company well for future growth.
4. GXO Logistics, Inc. (NYSE:GXO)
Number of Hedge Fund Holders: 49
GXO Logistics, Inc. (NYSE:GXO) emerged as an independent company in 2021, after a spin-off from XPO Logistics, in an attempt to unlock the value of this specialized supply chain solutions provider. GXO possesses unique expertise in leveraging innovative technologies like AI and robotics to optimize e-commerce fulfillment operations, warehouse management, and cold chain logistics. More than 30% of Fortune 100 companies are GXO’s, which includes large retailers, brand managers, and OEMs, which proves the company’s leading position in the logistics space.
GXO Logistics, Inc. (NYSE:GXO) delivered record revenue and adjusted EBITDA in 2024, with adjusted EBITDA growing 30% YoY in Q4 alone. The company generated revenue of $11.7 billion for the full year 2024, growing 20% with 3% organic growth, nearly doubling its revenue since 2020. The company achieved significant commercial success by closing over $1 billion of new business wins for the second consecutive year, including contracts with brands like Levi’s, LG, PUMA, and Tchibo. A landmark $2.5 billion total lifetime value fulfillment operation was secured in the healthcare sector, demonstrating expansion into new verticals.
For 2025, GXO Logistics, Inc. (NYSE:GXO) expects to deliver 3% to 6% organic growth with an adjusted EBITDA of $840 million to $860 million. The company’s technology leadership continues to be a key differentiator, with significant progress made in AI-enabled warehouse solutions, delivering productivity improvements of 3 to 4x in stock replenishments for major retailers. The sales pipeline is up 15% YoY as of the end of the most recent quarter, with the Americas pipeline up 20%, indicating strong momentum for future growth. The exceptional operating return on invested capital of 46%, which is well above the long-term targets, makes GXO one of the best freight stocks to buy.
3. Old Dominion Freight Line, Inc. (NASDAQ:ODFL)
Number of Hedge Fund Holders: 50
Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is a leading LTL carrier with a long history of serving American clients – the company started from a single truck in 1934 and ended up being one of the largest scale players in the US, operating more than 260 service centers across the country. ODFL provides both regional and national LTL freight services, as well as a broad spectrum of value-added solutions like global shipping, brokerage, and supply chain consulting. The company’s leadership position is illustrated by its flawless execution with more than 99% on-time delivery rate.
Old Dominion Freight Line, Inc. (NASDAQ:ODFL)’s latest Q4 financial results reflected continued softness in the domestic economy, with revenue declining 7.3% and diluted EPS decreasing 16.3% YoY. Despite short-term challenges, the company maintained its market share while delivering superior service with 99% on-time performance and a cargo claims ratio below 0.1%. The company also continued to invest in its network, spending $771 million on Capex last year, including significant investments in service center expansion – with over 30% excess capacity in service centers, ODFL is well-positioned for future growth opportunities, making it one of the best freight stocks to consider.
Looking forward, the management of Old Dominion Freight Line, Inc. (NASDAQ:ODFL) remains cautiously optimistic, with January 2025 results showing a 4.2% decrease in revenue per day on a YoY basis, primarily driven by a 7.1% decrease in LTL tons per day. The company’s consistent execution and commitment to superior service has enabled it to win more market share than any other LTL carrier over the past decade, and management remains confident in their ability to continue this trend.
2. United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 59
United Parcel Service, Inc. (NYSE:UPS) is a global powerhouse in package delivery and supply chain management – most of the products you encounter and use daily are probably handled by the company at some point. Operating one of the world’s largest air and ground networks, UPS covers more than 220 countries and territories. Its services are divided into US Domestic Package, International Package, and Supply Chain & Freight, covering everything from day-definite deliveries to customs brokerage and logistics solutions.
United Parcel Service, Inc. (NYSE:UPS) delivered strong Q4 results with revenue increasing 1.5% and operating profit growing 11.2%. The company announced significant strategic changes, including an agreement to reduce volume from their largest customer, Amazon, by more than 50% by 2H 2026 and the complete insourcing of SurePost delivery operations. UPS is also launching “Efficiency Reimagined” initiatives expected to drive approximately $1 billion in savings and plans to close up to 10% of buildings and reduce vehicle and aircraft fleets as part of network reconfiguration.
For 2025, United Parcel Service, Inc. (NYSE:UPS) plans to focus on growing in higher-value segments. Healthcare is a hyper-promising growth direction for the company, as 2024 revenue reached $10.5 billion with plans to grow to $20 billion by 2026. The company maintained strong financial discipline, with $10.1 billion in cash from operations in 2024, and returned $5.9 billion to shareholders through dividends and share repurchases. UPS expects to expand the US Domestic operating margin in every quarter of 2025, targeting a 12% operating margin by the fourth quarter of 2026. With strong guidance ahead, UPS ranks 2nd on our list of best freight stocks to buy.
1. FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Holders: 66
FedEx Corporation (NYSE:FDX) is a close competitor of UPS as it closely matches the scale and capabilities of its rival – it operates one of the largest express air fleets with coverage of more than 200 countries. The company provides both domestic and international package delivery, LTL, Truckload, brokerage, and contract logistics services. FDX also leverages advanced analytics and machine learning capabilities to offer real-time tracking, visibility and improve the speed and accuracy of deliveries.
FedEx Corporation (NYSE:FDX) delivered a strong performance in its latest Q3 2025, with revenue growing 2% YoY for the first time this fiscal year while achieving 12% adjusted operating income growth despite significant headwinds. The company successfully achieved $600 million in DRIVE savings during the quarter, continuing its progress toward structural cost reduction goals. FDX also showed robust performance with adjusted operating income up 17%, despite challenges from the USPS contract expiration and severe weather events.
Looking ahead, FedEx Corporation (NYSE:FDX) cited an uncertain demand environment and higher-than-expected inflationary pressures. The company remains focused on transformation initiatives, including DRIVE, Network 2.0, and Tricolor, which are expected to create long-term value and offset some of the short-term headwinds. Despite current challenges, notable progress was made in Europe, with the best service levels seen in years driving profitable share growth, and the company remains on track to achieve $600 million in DRIVE savings from Europe by fiscal year-end. The company’s strategic initiatives have fundamentally changed its structural costs and positioned it to expand into new market segments profitably.
Overall, FedEx Corporation (NYSE:FDX) ranks first among the 12 best freight stocks according to hedge funds. While we acknowledge the potential of FDX, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than FDX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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