In this article, we discuss the 5 best logistics stocks to buy now. If you want to read our detailed discussion on the logistics industry, you can go directly to the 11 Best Logistics Stocks to Buy.
5. United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 40
Dollar Value of Hedge Fund Holdings: $695,486,000
United Parcel Service, Inc. (NYSE:UPS) is an Atlanta, Georgia-based company founded in 1907. The company has emerged as one of the most notable names in the logistics industry in the recent past. United Parcel Service, Inc. (NYSE:UPS) has 481,000 employees, along with a fleet of 237 aircraft and a ground fleet of 110,000 delivery vehicles as of 2023.
Of the 943 hedge funds in Insider Monkey’s database, Bailard Inc is the leading hedge fund investor in United Parcel Service, Inc. (NYSE:UPS) as of Q2 2023.
4. Norfolk Southern Corporation (NYSE:NSC)
Number of Hedge Fund Holders: 51
Dollar Value of Hedge Fund Holdings: $1,863,012,000
Norfolk Southern Corporation (NYSE:NSC) is another Atlanta, Georgia-based company on our list of the 11 best logistics stocks. The company provides numerous logistics services that complement its core railroad operations.
Norfolk Southern Corporation (NYSE:NSC) has aggressively bought back its shares over the last year. The company repurchased shares worth around $3.4 billion in 2022 and $3.1 billion in 2021. Experts think Norfolk Southern Corporation (NYSE:NSC) stock has the potential to unlock significant upside for investors once it overcomes the legal challenges related to a February 2023 train derailment in East Palestine, Ohio.
The London Company shared its stance on Norfolk Southern Corporation (NYSE:NSC) in its Q1 2023 investor letter. Here’s what the firm said:
“Norfolk Southern Corporation (NYSE:NSC) – NSC was a significant underperformer this quarter reflecting weaker than expected quarterly earnings and news of a train derailment in Ohio. Fortunately, there were no fatalities related to the derailment, but there was environmental damage. Historically, the financial impact from train derailments have been relatively small and NSC’s insurance coverage could help cushion the blow. We believe NSC will emerge from this relatively unscathed, but will have to reinforce some of their network due to changes made from precision scheduled railroading efforts.”
3. FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Holders: 55
Dollar Value of Hedge Fund Holdings: $2,682,257,000
FedEx Corporation (NYSE:FDX) is a Memphis, Tennessee-based logistics and transportation company. The company is famous for its express delivery services.
FedEx Corporation (NYSE:FDX) is in the middle of a transformation journey as it is implementing cost-reduction measures and driving operational improvements with a keen focus on enhancing the customer experience. The DRIVE transformation initiatives have started to generate positive results for FedEx Corporation (NYSE:FDX). Furthermore, in April, the company also announced a 10% dividend increase for FY 2024.
Here’s what The London Company said about FedEx Corporation (NYSE:FDX) in its Q1 2023 investor letter:
“FedEx Corporation (NYSE:FDX) – FDX shares rebounded in Q1 following weakness in 2022. FDX was able to exceed lowered earnings expectations on better cost containment including trimming management ranks. We continue to own FDX shares reflecting its global parcel and freight networks, as well as the company’s potential to improve operating results to peer levels that would create significant shareholder value.”
2. CSX Corporation (NASDAQ:CSX)
Number of Hedge Fund Holders: 61
Dollar Value of Hedge Fund Holdings: $4,035,904,000
CSX Corporation (NASDAQ:CSX) is a rail-based freight transportation services provider.
On July 3, it was announced that CSX Corporation (NASDAQ:CSX) has entered into an agreement with Canadian Pacific Kansas City Limited (NYSE:CP) and Genesee and Wyoming (G&W) that will result in the creation of a new freight corridor that will connect the state of Alabama in the Southeastern region with Texas and Mexico. CSX Corporation (NASDAQ:CSX) has a heavy emphasis on the eastern side of the US, as it is targeting 20 new sites in the area for expansion of services.
1. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 85
Dollar Value of Hedge Fund Holdings: $4,042,787,000
Union Pacific Corporation (NYSE:UNP) is an Omaha, Nebraska-based Class I freight railroad corporation with an extensive railroad network that expands across 32,000 miles with a roster of 8,300 locomotives. This makes it the biggest publicly listed railroad company in the US.
Union Pacific Corporation (NYSE:UNP) plays an important part in exporting goods to Canada and Mexico as well and is considered a backbone of the American economy. The company’s only major competitor in the Class I freight railroad services is Warren Buffett’s Berkshire Hathaway Inc.’s (NYSE:BRK-B) owned BNSF Railway.
Here’s what Matrix Asset Advisors said about Union Pacific Corporation (NYSE:UNP) in its Q1 2023 investor letter:
“During the quarter we added a new position in Union Pacific Corporation (NYSE:UNP). Union Pacific (UNP) is the 2nd largest railroad network in the United States just behind Burlington Northern Santa Fe. The firm operates in the Western, Midwestern, and Southern portions of the United States. 90% of UNP sales come from the US and 10% from Mexico. Over the past decade, railroads gained market share from the trucking industry because it costs 10-40% less to ship via rails than trucks. The company has a long history of consistent operating growth and profitability. The shares fell from a high of $278 in May of 2022 after the firm experienced operating challenges due to a slower macro environment and higher expenses.”
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