In this article, we discuss 11 Best Delivery Stocks to Buy According to Hedge Funds.
In the fast-paced world where convenience and speed are essential, the delivery sector has become increasingly important. The sector covers a wide range of companies. This includes those offering traditional courier services and those innovating in the areas of drone delivery and advanced logistics solutions. These companies are essential in bridging the gap between merchants and consumers.
The rise in demand for delivery services is tied to the rise in global e-commerce. According to an analysis by environmental group Stand.earth, global e-commerce is expected to expand at a rate more than double that of in-store purchases. By the end of this decade, 25,000 packages are expected to be dispatched every second. The rise in global e-commerce has also caused a change in people’s buying patterns around the world. Americans now do more than 15% of their shopping on online platforms, which amounts to a staggering value of about $1 trillion annually.
COVID-19 accelerated the shift towards online shopping and heightened expectations for fast, reliable delivery services. This shift is not merely a temporary adjustment. It marks a long-term change in consumer behavior, underscoring the importance of robust delivery systems. The food delivery sector, in particular, is witnessing robust growth. The global online food delivery is forecasted to reach $1.79 trillion in revenues by 2028. In the U.S and China, the grocery delivery niche is expected to outperform. The fast growth of the grocery delivery niche indicates a lasting change in consumer behavior, which is shifting to more convenient methods.
Rapid Delivery Comes at a Cost to the Planet
Although the demand for fast delivery is rising globally. This is having a substantial negative impact on the planet. The demand for quick package delivery has significantly impacted the environment. Major delivery companies like FedEx Corporation (NYSE:FDX), United Parcel Service, Inc. (NYSE:UPS), and DHL emitted 92 million tons of greenhouse gases in 2022, exceeding the entire carbon footprint of countries like Greece. Despite the apparent need for more environmentally friendly operations, these companies have slowly adopted electric vehicles. Some have even scaled back their climate pledges amid a global delivery surge. Several factors contribute to this reluctance. These include the high initial expenses of electric trucks and the extensive and substantial costs of upgrading charging infrastructure.
Progress in electrifying delivery fleets has been mixed. Companies like Amazon.com, Inc. (NASDAQ: AMZN) and DHL have made notable strides in deploying electric trucks in the US and Europe, respectively. The overall industry efforts fall behind the rising emissions caused by increased delivery volumes. Companies point to financial sustainability, significant capital investment requirements, and the current insufficiency of charging infrastructure as major obstacles to the faster adoption of electric vehicles. Pressure from both local and global regulations is increasing. Consumer demand for greener options is also growing, emphasizing the urgent need for the delivery industry to expedite its transition to electric fleets.
In 2024, delivery companies have performed been performing well. Uber Technologies, Inc. (NYSE:UBER), a key player in the delivery sector, has delivered exceptional returns to investors. This mirrors the broader trend in the market. Service-oriented companies, especially those in the delivery sector, have continued to gain investor interest due to changing consumer behaviors and the increased reliance on delivery services.
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Our Methodology
To pick out the firms for this article, we first gathered all the publicly traded firms that offer delivery services. Then, the number of hedge funds out of the 933 funds part of Insider Monkey’s database for the fourth quarter of 2023 that had invested in them was determined. The list was then ranked according to the number of hedge fund positions in each company.
Best Delivery Stocks to Buy According to Hedge Funds
11. Grubhub Inc. (NYSE:GRUB)
Number of Hedge Fund Holders: 1
Grubhub Inc. (NYSE:GRUB) is a leading online and mobile food-ordering and delivery marketplace that connects diners with local restaurants. The company has an extensive network of participating restaurants and has developed a sophisticated delivery system to ensure timely and reliable service.
In Q4 2023, the hedge fund holdings in Grubhub Inc. (NYSE:GRUB) remained stable at 1. The total value of the holding experienced a modest increase, rising from approximately $62.7 thousand in Q3 2023 to about $77 thousand in Q4 2023.
In addition to Grubhub Inc. (NYSE:GRUB), Uber Technologies, Inc. (NYSE:UBER), DoorDash, Inc. (NYSE:DASH), and Amazon.com, Inc. (NASDAQ:AMZN) are part of our list of 11 best delivery stocks to buy according to hedge funds.
10. Universal Logistics Holdings, Inc. (NASDAQ:ULH)
Number of Hedge Fund Holders: 5
Universal Logistics Holdings, Inc. (NASDAQ:ULH) is a full-service provider of customized transportation and logistics solutions. It offers a broad suite of services, including intermodal transport, truckload brokerage, dedicated contract carriage, and international shipping. Universal Logistics Holdings, Inc. (NASDAQ:ULH)’s delivery network is designed to address complex logistics challenges, featuring an integrated approach that combines different modes of transportation to optimize delivery efficiency and costs.
Universal Logistics Holdings Inc. (NASDAQ:ULH) saw a decrease in hedge fund holdings from 7 to 5 in Q4 2023. However, the total value of these holdings saw a decrease from about $12.1 million in Q3 2023 to $11.2 million in Q4 2023.
9. Marten Transport, Ltd (NASDAQ:MRTN)
Number of Hedge Fund Holders: 13
Marten Transport, Ltd (NASDAQ:MRTN) specializes in temperature-sensitive freight transport, offering truckload, dedicated, and intermodal services. With a strong emphasis on timely and safe delivery, Marten Transport, Ltd (NASDAQ:MRTN)has established a reliable network for transporting goods that require refrigeration or temperature control. Their high-quality equipment and advanced tracking technology ensure that products arrive in perfect condition and on schedule.
Marten Transport Ltd. (NASDAQ:MRTN) witnessed a decrease in hedge fund holdings from 16 to 13 in Q4 2023, yet this was juxtaposed by a significant increase in the total value of these holdings from approximately $19.2 million to $29.0 million.
8. Pitney Bowes Inc. (NYSE:PBI)
Number of Hedge Fund Holders: 14
Pitney Bowes Inc. (NYSE:PBI) is a global technology company offering innovative products and solutions in the areas of e-commerce, shipping, mailing, and financial services. The company’s delivery and logistics services are designed to help businesses send mail and parcels efficiently. With a focus on facilitating cross-border e-commerce, Pitney Bowes Inc. (NYSE:PBI) provides a delivery network that includes shipping APIs, postage meters, and presorting services to streamline the delivery process for businesses of all sizes.
In Q4 2023, hedge fund holdings in Pitney Bowes Inc. (NYSE:PBI) decreased slightly from 15 to 14, reflecting a minor reduction in hedge fund interest. Nonetheless, the total value of these holdings increased notably, from around $16.9 million in Q3 2023 to approximately $19.5 million in Q4 2023.
7. Lyft, Inc. (NASDAQ:LYFT)
Number of Hedge Fund Holders: 39
Primarily known for its ride-sharing platform, Lyft, Inc. (NASDAQ:LYFT) also entered the delivery service domain to diversify its offerings. Lyft’s delivery network focuses on providing essential items such as medical supplies and groceries, serving healthcare organizations, businesses, and government entities. The company aims to utilize their vast network of drivers to fulfill on-demand and scheduled deliveries.
For Lyft, Inc. (NASDAQ:LYFT), hedge fund holdings marginally decreased from 40 in Q3 2023 to 39 in Q4 2023. However, the total value of these holdings rose from around $589.14 million to approximately $784.23 million.
6. United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 46
United Parcel Service, Inc. (NYSE:UPS) is one of the largest and most recognized global shipping and logistics companies. It offers a wide array of delivery services, including next-day air, ground, and international shipping. Its extensive delivery network is supported by advanced logistics technology. This ensures efficient package handling and delivery for both businesses and individual consumers.
Q4 2023 witnessed an increase in hedge fund holdings for United Parcel Service, Inc. (NYSE:UPS) from 42 to 46. The total value of hedge fund holdings in the company increased from approximately $1.8 billion to $2.1 billion. This growth in value of around $323.76 million reflects growing hedge fund optimism in the company’s prospects.
ClearBridge Large Cap Value Strategy made the following comment about United Parcel Service, Inc. (NYSE:UPS) in its Q3 2023 investor letter:
A higher-for-longer rate mentality taking hold was a headwind for economically sensitive stocks. Rising wages have been one of the main drivers of inflation, and this has proved to be a sticky area, keeping the Fed’s attention and weighing on share prices. For example, United Parcel Service, Inc. (NYSE:UPS) renegotiated a wage increase for its union-backed workforce this summer, which weighed on margins that were already being constricted by slowing volumes. While the new union deal will dampen profits over the next 12 months due to the front-end-loaded nature of the new five-year contract, management gained increased flexibility to deploy automation, which we think should further enhance UPS’s strong competitive position and provide a long-term tailwind to profitability.”
5. DoorDash, Inc. (NYSE:DASH)
Number of Hedge Fund Holders: 64
DoorDash, Inc. (NYSE:DASH) is the largest food delivery platform in the United States. The company has expanded in other areas, including convenience delivery, in which it now holds over 60% market share in the U.S. Despite the large market share, the company continues to leverage partnerships to fuel growth. Over the past one year, the company’s stock has risen a staggering 128% in value.
DoorDash, Inc. (NYSE:DASH) experienced an uptrend in hedge fund holdings that increased from 57 to 64 in Q4 2023. The total value of these holdings jumped from approximately $2.2 billion to $3.0 billion. The impressive increase of $733.77 million in total value reflects robust hedge fund confidence in the growth trajectory of DoorDash, Inc. (NYSE:DASH).
4. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 68
Shopify Inc. (NYSE:SHOP) is an e-commerce giant. It enables businesses to set up online stores and sell their products. Although not a pure-play delivery company, Shopify Inc. (NYSE:SHOP) integrates with various delivery services to provide seamless logistics support to its merchants. The Shopify Fulfillment Network offers smart inventory allocation across warehouses and streamlined fulfillment processes to ensure timely deliveries.
Hedge fund holdings in Shopify Inc. (NYSE:SHOP) slightly decreased from 69 to 68 in Q4 2023. Despite this, the total value of these holdings surged significantly from around $2.7 billion to $5.9 billion.
3. FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Holders: 70
FedEx Corporation (NYSE:FDX) provides a comprehensive suite of delivery services, including overnight couriers, freight services, and international shipping. The company continues to invest in technology to enhance its logistics infrastructure, providing real-time tracking and efficient delivery solutions to its customers. Recently, FedEx Corporation (NYSE:FDX) is reported to have been in talks with Amazon (NASDAQ:AMZN) to do business together. Both the companies ended their partnership back in 2019.
In Q4 2023, FedEx Corporation (NYSE:FDX) saw its hedge fund holdings increase from 67 to 70. However, the total value of these holdings decreased from about $2.9 billion to $2.3 billion, a reduction of roughly $640.66 million.
2. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 129
Uber Technologies, Inc. (NYSE:UBER) is widely recognized for its ride-sharing service. However, the company has made a substantial impact with Uber Eats, its food delivery service. Uber Eats operates in numerous cities globally. It offers a platform for restaurants to deliver food to customers efficiently. Uber Technologies, Inc. (NYSE:UBER) continues to innovate in the delivery space. It is exploring autonomous delivery technologies and expanding its delivery services beyond food.
Hedge fund holdings in Uber Technologies, Inc. (NYSE:UBER) decreased from 146 to 129 in Q4 2023. Despite the reduced number of hedge funds, the total value of hedge fund holdings increased from around $8.1 billion to $8.7 billion.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 293
Amazon.com, Inc. (NASDAQ:AMZN) is a global leader in e-commerce and cloud computing, with a vast delivery network that sets the standard for the industry. Amazon Prime offers expedited delivery services, including two-day and same-day delivery options. The company is pioneering in delivery innovation with drone delivery initiatives, advanced robotics in its fulfillment centers, and a dedicated air cargo fleet to ensure rapid delivery times.
For Amazon.com, Inc. (NASDAQ:AMZN), there was an increase in hedge fund holdings from 286 to 293 in Q4 2023. Additionally, the total value of the holdings increased significantly from roughly $38.8 billion to $50.8 billion. The staggering increase of approximately $11.9 billion indicates strong hedge fund conviction in Amazon.com, Inc. (NASDAQ:AMZN)’s continued dominance and growth potential.
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Disclosure. None. 11 Best Delivery Stocks to Buy According to Hedge Funds was initially published on Insider Monkey.
