Freight Markets Are Rolling Over, But Hub Group Is Well-Positioned Long Term

It's never easy to buy into a cyclical downturn, as cycles have a way of defying expectations for duration and depth. Moreover, Hub Group (NASDAQ:HUBG) hasn't really sold off all that much from its peak, despite the likelihood of weaker intermodal and brokerage pricing and some fall off in volumes as economic activity slows. I think there are good reasons Hub Group hasn't sold off much, though, as this is one of the best-run intermodal/logistics companies that I follow.

Hub Group shares are up about 40% since my last update, handily outperforming other stocks that I watch in the space, including C.H. Robinson (CHRW), J.B. Hunt (JBHT), Schneider (SNDR), and XPO (XPO). I do see some risk from the spread between longer-term sell-side analyst estimates and management's targets (the sell-side is higher), and likewise, I do see risk that the next 12-24 months could be tougher economically than currently expected, but it's hard not to like the longer-term value proposition here.

 

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Freight Markets Are Rolling Over, But Hub Group Is Well-Positioned Long Term