Insights

Why It’s a Great Time to Pick Up This Logistics Stock

Investors have an array of choices when it comes to strong companies in the logistics industry right now. In this Motley Fool Live segment from “Ask Us Anything,” recorded on April 11, Fool.com contributor Lou Whiteman explains why GXO Logistics (NYSE: GXO) is currently his top pick. 

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Lou Whiteman: Just since March 17th Hub is down about 25 percent but I just pulled some numbers. GXO is off 18 percent. Old Dominion Freight Line is down almost 20 percent. Same thing with J. B. Hunt, USA Truck is down 33 percent. Trucking is a really, really flexible business. You see capacity come online and offline at the drop of a hat. We saw capacity rush online as rates spiked late last year. From what people are saying that rates just fell off a cliff in the last few weeks and that is really hitting these stocks, as word or talk gets out there. There is some influential publications talk about it.
Is it an entry point? I think you have to own all of these for the long term because they are cyclical. Hub wouldn’t be my favorite. As anyone who watches this knows if I’m going to buy a logistics company right now, if it’s not C. H. Robs which is a good company, but I’m going with GXO Logistics. I really like their ability to play on the e-commerce as the back to the e-commerce. If you’re in for the long haul, I think it could fall further from here potentially depending on what the quarterly results, what the commentary is about supply and demand. But if you’re in for the long haul, I think that it’s a great time to get involved in one of these. Hub’s a fine operator, I just don’t think it’s the best out there. For me, I’m partial to GXO.
Lou Whiteman owns USA Truck. The Motley Fool owns and recommends Old Dominion Freight Line. The Motley Fool recommends C.H. Robinson Worldwide. The Motley Fool has a disclosure policy. –

Investors have an array of choices when it comes to strong companies in the logistics industry right now. In this Motley Fool Live segment from “Ask Us Anything,” recorded on April 11, Fool.com contributor Lou Whiteman explains why GXO Logistics (NYSE: GXO) is currently his top pick. 

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Lou Whiteman: Just since March 17th Hub is down about 25 percent but I just pulled some numbers. GXO is off 18 percent. Old Dominion Freight Line is down almost 20 percent. Same thing with J. B. Hunt, USA Truck is down 33 percent. Trucking is a really, really flexible business. You see capacity come online and offline at the drop of a hat. We saw capacity rush online as rates spiked late last year. From what people are saying that rates just fell off a cliff in the last few weeks and that is really hitting these stocks, as word or talk gets out there. There is some influential publications talk about it.

Is it an entry point? I think you have to own all of these for the long term because they are cyclical. Hub wouldn’t be my favorite. As anyone who watches this knows if I’m going to buy a logistics company right now, if it’s not C. H. Robs which is a good company, but I’m going with GXO Logistics. I really like their ability to play on the e-commerce as the back to the e-commerce. If you’re in for the long haul, I think it could fall further from here potentially depending on what the quarterly results, what the commentary is about supply and demand. But if you’re in for the long haul, I think that it’s a great time to get involved in one of these. Hub’s a fine operator, I just don’t think it’s the best out there. For me, I’m partial to GXO.

Lou Whiteman owns USA Truck. The Motley Fool owns and recommends Old Dominion Freight Line. The Motley Fool recommends C.H. Robinson Worldwide. The Motley Fool has a disclosure policy.

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