5 Cheap Transportation Stocks To Buy

2. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT)

Number of Hedge Fund Holders: 33

Trailing P/E Ratio: 20.79

J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) offers surface transportation, delivery, and logistic services within North America. The company is divided into five segments – Intermodal, Dedicated Contract Services, Integrated Capacity Solutions, Final Mile Services, and Truckload. According to Goldman Sachs, J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) stock has not performed as well as other companies in the light transportation sector this year. While the company’s shares have risen by 8% in 2023, Goldman analysts believe that “asset light names” like JBHT will likely outperform later in the cycle. Goldman Sachs set a price target of $202 for J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) and maintained a Buy rating on the stock on July 18. 

According to Insider Monkey’s first quarter database, 33 hedge funds were long J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), compared to 30 funds in the prior quarter. Henry Ellenbogen’s Durable Capital Partners is the largest stakeholder of the company, with 2 million shares worth $367 million. 

Wedgewood SMID Cap Strategy made the following comment about J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) in its Q1 2023 investor letter:

“As we continue to familiarize our clients with our SMID portfolio’s holdings, we would like to discuss our significant exposure to the U.S. Transportation industry. We currently have three transportation holdings and have been substantially overweight the industry in comparison to the Russell 2500 index for several years. While these undoubtedly are cyclical business models, we see many long-term tailwinds for the domestic Transportation industry, which will provide attractive growth levels and will allow these companies to improve their returns on investment over time.

J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is the country’s largest independent provider of intermodal transportation services, with smaller businesses in trucking and logistics. Intermodal transportation refers to freight deliveries that require the use of more than one “mode” of transportation, most often including some combination of ocean, railroad, and truck between source and destination. J.B. Hunt generally provides the rail portion of these intermodal loads.

J.B. Hunt benefited from the exacerbated shortage in Truckload capacity in both their intermodal business—where they could directly substitute railroad service for people who weren’t able to find TL capacity—and in their smaller, but rapidly growing Dedicated TL division, where the company takes over all or a portion of a shipping customer’s trucking fleet. While customers were paying significantly higher prices and still struggling to find any trucking capacity, they found it very attractive to contract for a dedicated, outsourced fleet with J.B. Hunt.”