We recently compiled a list of the 11 Best Logistics Stocks to Invest in Right Now.In this article, we are going to take a look at where C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) stands against the other logistics stocks.
Logistics companies transporting goods around the world continue to navigate uncertainty as Donald Trump plans to impose 60% tariffs on goods from China and 25% tariffs on goods from Mexico and Canada. As reported by CNBC, Dave Bozeman, the new CEO of C.H. Robinson, sees an opportunity in Trump tariffs. The logistics giant is a top 3 carrier on the China-U.S. freight lane also carrying nearly 10% of the freight on the US-Mexico lane. Citi transportation analyst Ari Rosa considers the company’s business diversified enough to work through tariffs despite its global forwarding business being very exposed to China. The CEO’s stance on the tariffs was quite positive as well, as he stated:
“The freight still has to move. It might just move at a different starting point, and we would still be there to move that.”
In an interview with CNBC, Ravi Jakhar of the firm Allcargo Group, the world’s LCL consolidation leader and India’s largest integrated logistics solutions provider, reiterated optimism regarding the Trump tariff risks. He mentioned how over 4 years ago when sanctions came in from the Trump administration, the firm saw an increased import into its Vietnam offices from China and improved export out of Vietnam, alongside increased momentum in Indonesia and the Philippines. In his opinion, whether it is a short-term tariff sanction or a long-term structural trend, trade flows could change in terms of origins and destinations but the overall trade flows would remain robust as long as manufacturing and consumption are there.
As of what’s recent in the logistics landscape, the holiday season is in full swing, with holiday surcharges playing a crucial role in profitability for logistics companies since they charge their big retail customers extra fees on a per-package basis compared to their June volume during the busy holiday season. The increase in e-commerce is also benefitting such logistics providers and full truckload carriers. Simultaneously, an increase in freight in anticipation of future tariffs is also being seen.
A survey from Merchants Fleet and Atomik Research of decision-makers in organizations that typically transport freights of consumer-packaged goods throughout the US revealed that 88% saw AI as useful in alleviating pressures on their fleets this peak delivery season. AI’s data-driven capabilities are to streamline operations and decision-making, with the majority of the respondents citing supply chain optimization as a primary benefit. Other advantages mentioned were improved route optimization, enhanced inventory management, and reduced downtime by identifying maintenance issues with fleet vehicles.
Our Methodology:
In order to compile a list of the 11 best logistics stocks to invest in right now, we went through stock screeners, ETFs, and media reports to make a list of relevant stocks. Moving on, we shortlisted the top 11 stocks from our list which had the highest number of hedge fund holders. The 11 best logistics stocks to invest in right now have been arranged in ascending order of their hedge fund holders as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. 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).
A long line of tractor trailers transporting products across the highway.
Number of Hedge Funds:30
C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) offers freight transportation and logistics, outsource solutions, produce sourcing, and information services to customers through a network of offices in North America, South America, Europe, Asia, and Oceania. The company has been shaping logistics for more than 115 years as it has grown from a wholesale produce brokerage house in North Dakota to the world’s most powerful logistics platform.
CHRW is a global logistics giant, with more than 90,000 customers and 450,000 contract carriers in its network trusting it to manage $22 billion in freight annually. The company enables the seamless delivery of goods across industries and continents via truckload, less-than-truckload, ocean, air, and beyond, through its unparalleled scale expertise, and tailored solutions. The focus on meeting the needs of customers, contract carriers, and suppliers has positioned CHRW as a leader in freight transportation, supply chain logistics, and produce sourcing.
The financials came in strong for the global logistics leader as it posted a significant year-over-year increase in profitability in 2024’s third quarter. This was a result of strong execution, disciplined volume growth, and improvement in gross profit, productivity, and operating leverage, despite a historically prolonged freight recession.
The company has also implemented a new lean-based operating model enhancing execution, discipline, and accountability across the company. Commenting on the good start for the new operating model, C.H. Robinson’s President and Chief Executive Officer, Dave Bozeman, said:
“Empowering our people with the Robinson operating model is creating a flywheel of performance, talent development and accountability that is evolving our culture to be driven by progress, execution and proactive problem identification and resolution. This is showing up in improvements such as more disciplined pricing and better decisions on the volume that we’re seeking. We are still early in our journey, but the operating model is helping us execute a solid strategy even better, and we expect further improvement as our team continues to embrace this new way of operating”
Overall CHRW ranks 11th on our list of the best logistics stocks to invest in right now. While we acknowledge the potential of CHRW as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than CHRW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
