We recently compiled a list of the 10 Best Shipping Stocks To Invest In Now. In this article, we are going to take a look at where Canadian Pacific Kansas City Limited (NYSE:CP) stands against other best shipping stocks to invest in now.
Shipping refers to the transportation of goods and commodities from one place to another, encompassing various modes of transportation such as road, rail, air, and sea. The shipping industry plays a vital role in connecting businesses and consumers across the globe by facilitating the exchange of goods and driving economic growth. From the delivery of online purchases to the transportation of raw materials and finished goods, shipping plays an essential component of modern commerce. According to a report by Fortune Business Insights, the cargo shipping market size was recorded at 11.89 billion tons in 2024 and is expected to reach 14.72 billion tons by 2032, exhibiting a CAGR of 2.7%. The industry is diverse, with companies specializing in different modes of transportation, such as trucking, rail freight, air cargo, and marine shipping, as well as logistics and courier services.
Investing in shipping stocks can be a lucrative opportunity, as the industry is closely tied to consumer spending, economic growth, and global trade. As e-commerce continues to grow, the demand for fast and reliable shipping services is increasing, driving up revenues and profits for shipping companies. Additionally, the rise of just-in-time manufacturing and same-day delivery is creating new opportunities for companies that can provide flexible and efficient logistics solutions. The shipping industry is also experiencing a shift towards digitalization, with the adoption of technologies such as blockchain, artificial intelligence, and the Internet of Things (IoT) to improve efficiency, reduce costs, and enhance customer experience.
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According to a report by Hillebrand Gori, part of DHL Global, the shipping industry has experienced significant growth and evolution in 2024, marked by both opportunities and challenges. The report highlights the persistent growth in demand, driven by strong market activity across key regions, particularly in North and Latin America.
The growth in demand has been met with an expansion in the global container fleet, which is set to increase by a further 5% in 2025. However, the report notes that operational challenges, such as re-routings due to geopolitical risks in regions like the Red Sea, continue to affect capacity and scheduling. Vessels are often rerouted, leading to delays and higher fuel costs. Additionally, labor unrest in countries such as India and on the U.S. East Coast disrupted supply chains. Companies must adapt to these pressures by investing in resilient logistics solutions and closely monitoring geopolitical developments.
The report also notes that ocean freight rates have been volatile in 2024, primarily due to capacity shortages and rerouting costs. While rates may soften in certain trade lanes, others, such as those connecting Oceania and the Atlantic, are expected to remain high. Looking ahead, the report suggests that the shipping industry will continue to experience both opportunities and uncertainties.
The shipping industry plays a vital role in facilitating trade and connecting markets in the global economy. As e-commerce growth accelerates, and the economy stabilizes, shipping companies are well-positioned to capitalize on emerging opportunities.
A freight train making its way through a majestic mountain range, snow-capped peaks in the distance.
Our Methodology
To compile our list of the 10 best shipping stocks to invest in now, we scanned transportation ETFs plus online rankings to compile an initial list of 25 companies that offer shipping services. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Canadian Pacific Kansas City Limited (NYSE:CP)
Number of Hedge Fund Investors: 52
Canadian Pacific Kansas City Limited (NYSE:CP) is a transcontinental railway shipping operator with a robust network spanning over 20,000 track miles. This network connects more than 30 ports, 30 automotive facilities, and numerous transload facilities and shortlines across North America. Canadian Pacific Kansas City Limited (NYSE:CP) serves a wide variety of industries, including agriculture, energy, chemicals, automotive, and consumer goods.
As the only railroad that links the United States, Canada, and Mexico through a single integrated network, Canadian Pacific Kansas City Limited (NYSE:CP) holds a unique position in the market. The company’s logistics hubs in Bensenville and Dallas play a pivotal role in supporting automotive logistics. Canadian Pacific Kansas City Limited (NYSE:CP) is actively pursuing partnerships to improve its services for both auto parts and finished vehicles. Additionally, Canadian Pacific Kansas City Limited (NYSE:CP) is aligning its rail networks with other operators, such as CSX Corporation, to create seamless connections for shippers in Mexico, Texas, and the Southeastern United States. This collaboration is anticipated to significantly boost intermodal business, particularly in Mexico, where the demand for efficient cross-border transportation is rapidly growing.
Canadian Pacific Kansas City Limited (NYSE:CP) is also focused on enhancing train speeds, reducing terminal dwell times, and increasing train capacity. At the same time, the company is developing customer-centric solutions to tap into new business opportunities.
Overall CP ranks 3rd on our list of the best shipping stocks to invest in now. While we acknowledge the potential of CP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
