Logistics infrastructure is under strain across the U.S. right now, but with challenges come opportunities, including the opportunity for Hub Group (HUBG) to lock in better prices, continue its productivity/efficiency initiatives, and reinvest in the growth of what is already the second-largest intermodal services provider.
Balancing growth and margins will always be a challenge for providers like Hub Group and J.B. Hunt (JBHT), but I like how the business has evolved over the last four years and I like management's moves to expand the business's footprint (including the recent addition of a well-regard asset-light last-mile logistics provider). With the shares looking undervalued below the mid-$60's, I think near-term worries about gross margin pressure have created a window of opportunity here.
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