4 Red-Hot Freight Stocks to Buy Right Now

As the economic recovery and solid progress on the vaccination front help industries resume their operations and gradually return to pre-pandemic capacity, the need for the transportation of raw materials, equipment, and other goods is on the rise. Notably, ongoing supply chain issues have been driving the rising demand for transportation, logistics, and warehousing services. With many freight companies now increasing their capacity to meet the increasing demand, the industry should witness solid growth.

Also, an increased focus on improving fuel efficiency and a growing interest in autonomous trucking should help freight companies grow further. The global freight trucking market is expected to grow at a 3% CAGR to $1.11 trillion by 2027.

Hence, we believe Ryder System, Inc. (R), Daseke, Inc. (DSKE), P.A.M. Transportation Services, Inc. (PTSI), and Covenant Logistics Group, Inc. (CVLG) are well-positioned to capitalize on the industry tailwinds. So, it could be wise to bet on these stocks now.

Ryder System, Inc. (R)

R provides commercial fleet management, supply chain, and transportation management solutions worldwide to small businesses and large enterprises. The Miami-based company offers full-service leasing, commercial rental, and maintenance of trucks, tractors, trailers, and integrated services. It also provides financing to its customers to purchase a selection of used trucks, tractors, and trailers through its used vehicle sales program.

On September 16, 2021, Intercounty Distribution, a U.K.-based cargo & freight company, partnered with R to add 14 new DAF XF530 model trucks to its growing fleet in the Southwest. Because these trucks offer improved fuel efficiency and driver satisfaction, Intercounty Distribution looks forward to a long-term partnership with R.

On the same day, R partnered with Embark Trucks, Inc., a developer of autonomous technology for the trucking industry, to launch a nationwide network of up to 100 Embark transfer points for autonomous fleets, where R will provide yard operations, maintenance, and fleet management. R is looking forward to supporting and benefiting from Embark’s plan to commercialize autonomous freight.

For its fiscal second quarter, ended June 30, 2021, R’s total revenues increased 25.7% year-over-year to $2.38 billion. The company’s non-GAAP pre-tax earnings came in at $175.60 million, versus  a $64.05 million loss in the year-ago period. Its non-GAAP net earnings came in at $129.14 million, versus a $49.46 million net loss in the year-ago period. Its non-GAAP EPS was  $2.40, versus a  $0.95 loss in the prior-year period. As of June 30, 2021, the company had $267.99 million in cash and cash equivalents.

R’s EPS is estimated to rise 69.4% year-over-year to $2.05 in the current quarter, ending September 30, 2021. It surpassed the Street’s EPS estimates in three of the trailing four quarters. Analysts expect its revenue to be $2.37 billion for the current quarter, representing a 10.2% rise year-over-year.

The stock has gained 79.2% in price over the past year and 3% over the past month. It ended yesterday’s trading session at $78.70. 

R’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

The stock has an A grade for Growth, and a B grade for Value, Momentum, and Quality. Click here to see the additional ratings for R’s Stability and Sentiment.

Of the 23 stocks in the A-rated Trucking Freight industry, R is ranked #2.

Daseke, Inc. (DSKE)

DSKE, which is headquartered in Addison, Tex., provides transportation and logistics solutions, focusing on flatbed and specialized freight in the United States, Canada, and Mexico. The company provides fleet management, logistics, warehousing, trucking, and open deck transportation services. In addition, it transports aircraft parts, manufacturing equipment, commercial glass, high-security cargo, ammunition and explosives, lumber, building and construction materials, and heavy machinery.

DSKE’s total revenue for its fiscal second quarter, ended June 30, 2021, increased 14.9% year-over-year to $404 million. The company’s adjusted operating income came in at $48.4 million, up 124.1% from the prior-year period. Its adjusted was  $30.20 million for the quarter, representing a 208.2% rise from the year-ago period. Its adjusted EPS was $0.42, indicating a 223.1% year-over-year improvement. The company had $111.70 million in cash and cash equivalents as of June 30, 2021.

Analysts expect DSKE’s EPS to increase 17.8% year-over-year to $0.32 for the current quarter, ending September 30, 2021. DSKE surpassed consensus EPS estimates in three of the trailing four quarters. A $423.29 million consensus revenue estimate for the current quarter, represents a 12.6% gain from the prior-year period. Analysts expect the stock’s EPS to grow at a 25% rate per annum over the next five years.

The stock has gained 58.8% in price over the past year and 25.9% over the past three months. It closed yesterday’s trading session at $8.45. 

DSKE’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.

The stock has a B grade for Growth, Value, and Momentum. Click here to see the additional ratings for DSKE (Sentiment, Quality, and Stability).

DSKE is ranked #4 in the Trucking Freight industry. 

P.A.M. Transportation Services, Inc. (PTSI)

PTSI is a truckload transportation and logistics company. Its  freight consists primarily of automotive parts, expedited goods, consumer goods, and manufactured goods. In addition to offering dedicated, dry van, expedited, international, and logistics solutions, the Tontitown, Ark., company provides brokerage and logistics services.

For its fiscal second quarter, ended June 30, 2021, PTSI’s total operating revenues increased 73.4% year-over-year to $161.26 million. The company’s operating income came in at $21.02 million, compared to a $2.01 million loss in the year-ago period. PTSI’s net income came in at $15.32 million for the quarter, versus an $823,000 net loss in the year-ago period. Its EPS was  $2.66, compared to a $0.14 loss in the prior-year period. The company had $23.03 million in cash and cash equivalents as of June 30, 2021. 

PTSI has gained 102.9% in price over the past nine months and 37.9% over the past month. It closed yesterday’s trading session at $44.62. 

It’s no surprise that PAM has an overall A rating, which equates to Strong Buy in our POWR Ratings system.

The stock has an A grade for Growth, and a B for Value, Momentum, Sentiment, and Quality. Click here to see the additional ratings for PTSI’s Stability.

It is ranked #1 in the Trucking Freight industry.

Covenant Logistics Group, Inc. (CVLG)

CVLG in Chattanooga, Tenn., provides transportation and logistics services and operates through Expedited; Dedicated; Managed Freight; and Warehousing segments. The company also sells used equipment and offers leasing services. It serves parcel freight forwarders, less-than-truckload carriers, third-party logistics providers, and traditional truckload customers.

For its  fiscal second quarter, ended June 30, 2021, CVLG’s total revenue increased 33.7% year-over-year to $256.32 million. The company’s adjusted operating income came in at $19.85 million, indicating a 1961.7% year-over-year improvement. While its adjusted net income increased 3708.7% year-over-year to $16.26 million, its adjusted EPS increased 4700% to $0.96. As of June 30, 2021, the company had $4.97 million in cash and cash equivalents.

A $0.98 consensus EPS estimate for the current quarter, ending September 30, 2021, represents a 75% year-over-year improvement. CVLG’s revenue is estimated to rise 25% year-over-year to $259.37 million in the current quarter. It surpassed the Street’s EPS estimates in each of the trailing four quarters, which is impressive. CVLG’s EPS is expected to grow at a 5% rate per annum over the next five years.

The stock has gained 82.7% in price year-to-date and 19.9% over the past month. It ended yesterday’s trading session at $27.06. 

CVLG’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. 

The stock has an A grade for Growth, and a B grade for Value, Sentiment, and Momentum. Click here to see the additional ratings for CVLG’s Stability and Quality.

CVLG is ranked #3 in the Trucking Freight industry.

R shares were trading at $80.88 per share on Thursday afternoon, up $2.18 (+2.77%). Year-to-date, R has gained 34.07%, versus a 19.80% rise in the benchmark S&P 500 index during the same period.

Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.

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