Investopedia: Hub Group Could Deliver Value, But Mind The Margins
Done right, asset-light transportation/logistics services can be quite lucrative
even if the reported free cash flow margins are thin. As one of the
larger players in intermodal (and the largest asset-light intermodal
company), Hub Group (Nasdaq:HUBG) is taking advantage of the same intermodal growth trends that have been helping rival J.B. Hunt (Nasdaq:JBHT) and boosting the performances of Class 1 railroads such as Union Pacific (NYSE:UNP) and Norfolk Southern (NYSE:NSC).
Although Hub Group is vulnerable to a further macroeconomic slowdown
and a margin squeeze between rail carriers and customers, there could be
worthwhile value in these shares.