Can FedEx Corporation (FDX) Keep Rolling?

CH Robinson shares are intriguing in light of the company’s business model. It has been achieving volume and pricing increases in its core LTL business. Given the growth strategy, I like the stock’s upside potential at its current valuation.

Next, for another logistics provider not exposed to international markets, look into Hub Group Inc (NASDAQ:HUBG).The company contracts with railroads and trucking firms for its transportation operations. It has been keeping those transport costs in check as volumes climb, boosting the gross margin.

Hub Group, too, has strong liquidity. It has in the past grown through acquisition, including a major purchase in 2011 of Exel Transportation Services. The use of cash for further such purposes, along with stock repurchases, is possible.

Reliant on a healthy railroad market, Hub Group is poised to perform well as that shipping mode continues to gain headway. It has relationships with most of the major rail transporters in North America, such as CSX and Union Pacific.

Hub Group shares are at a two-year apex and have appeal for near-term price momentum. They are also a decent selection for a long-term portfolio.

The Scoop

FedEx Corporation (NYSE:FDX) has consistently invested in long-term projects aimed at driving long-term profit growth. Its shares reflect the prospects for an earnings turnaround next fiscal year that should materialize. Take note of the earnings release on March 20. In the meantime, I have highlighted just a couple of the stocks that may benefit from the currently favorable domestic shipping conditions. See also my previous blog dated January 14 where I highlighted several stocks including Forward Air Corp. and GATX Corp.

The article Can FedEx Keep Rolling? originally appeared on Fool.com and is written by Damon Churchwell.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.