Thanks to a COVID-19 pandemic-led supply and demand imbalance, most logistics operators have witnessed solid demand worldwide. In addition, record freight demand for consumer goods due to capacity shortages and port congestion is helping logistic companies increase their profits.
Investors’ interest in the logistics stocks is evident in the SPDR S&P Transportation ETF’s (XTN) 3.4% gains over the past month compared to the SPDR S&P 500 Trust ETF’s (SPY) 1.6% loss. Furthermore, the increasing adoption of IoT-enabled linked devices and tech-driven logistics services are expected to drive the logistic industry’s growth in the coming months. According to a report by Valuates Reports, the global logistics market is expected to grow at a 6.5% CAGR through 2027.
Given this backdrop, we think it could be wise to add Hub Group, Inc. (HUBG) and Radiant Logistics, Inc. (RLGT) to one’s watch list. These companies are not in the headlines each day but are well-positioned to capitalize on the industry tailwinds.
Hub Group, Inc. (HUBG)
Oak Brook, Ill.-based HUBG is an asset-light freight transportation management company that provides intermodal, truck brokerage, trucking, and managed transportation in North America. Its intermodal services include arranging for its customers' freight movement in containers and trailers for distances of 750 miles or more.
On Feb. 9, 2022, Dave Yeager, HUBG’s Chairman, and CEO, said, “As 2022 begins, we continue to see robust demand from our customers and favorable market conditions. We continue to make investments in our business to support our customers’ needs for capacity, service, and innovative solutions.”
HUBG’s revenue increased 32% year-over-year to $1.26 billion for its fiscal fourth quarter, ended Dec. 31, 2021. The company’s EBITDA has grown 142% year-over-year to $152.39 million, while its net income came in at $84.31 million, representing a 276.6% year-over-year increase. Also, its EPS was $5.06, up 131.1% year-over-year.
For the quarter ending March 31, 2022, analysts expect HUBG’s EPS and revenue to increase 182.4% and 28.6%, respectively, year-over-year to $1.44 and $1.18 billion. It surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 43.8% in price to close yesterday’s trading session at $79.20.
HUBG’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
The stock has an A grade for Growth and a B grade for Momentum and Sentiment. Within the A-rated Air Freight & Shipping Services industry, HUBG is ranked #8 out of 16 stocks.
Click here to see the additional POWR Ratings for HUBG (Value, Quality, and Stability).
Radiant Logistics, Inc. (RLGT)
RLGT is a third-party logistics company that primarily provides multi-modal transportation and logistics services in the United States and Canada. The Bellevue, Wash.-based company offers domestic and international air and ocean freight forwarding services; and freight brokerage services, including truckload, less than truckload, and intermodal services.
On February 15, 2022, RLGT’s CEO Bohn Crain, said, “Looking forward, we remain optimistic about our prospects and opportunities to continue to leverage our best-in-class technology, robust North American footprint, and extensive global network of service partners to continue to build on the great platform we have built here at Radiant."
RLGT’s net revenues increased 29.5% year-over-year to $71.59 million for its fiscal second quarter, ended December 31, 2021. The company’s adjusted EBITDA grew 38.4% year-over-year to $17.25 million, while its adjusted net income came in at $12.32 million, representing a 43% year-over-year increase. Also, its adjusted EPS came in at $0.24, up 41.2% year-over-year.
Analysts expect RLGT’s EPS and revenue to increase 35.8% and 43%, respectively, year-over-year to $0.91 and $1.27 billion in its fiscal year 2022. It surpassed the Street’s EPS estimates in three of the trailing four quarters. The stock has surged 20.9% over the past six months to close yesterday’s trading session at $7.34.
RLGT’s POWR Ratings reflect solid prospects. It has an A grade for Sentiment and a B grade for Growth.
Click here to see the additional POWR Ratings for RLGT (Stability, Momentum, Quality, and Value). RLGT is ranked #12 in the Air Freight & Shipping Services industry.
HUBG shares were trading at $79.57 per share on Friday afternoon, up $0.37 (+0.47%). Year-to-date, HUBG has declined -5.54%, versus a -8.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
2 Under-the-Radar Logistics Stocks to Add to Your Watchlist: Radiant and Hub Group StockNews.com
