In this article, we will take a look at the 5 best freight stocks to buy now. To read our analysis of the recent market trends and activity, you can go to the 10 Best Freight Stocks to Buy Now.
5. Norfolk Southern Corporation (NYSE:NSC)
Number of Hedge Fund Holders: 44
Norfolk Southern Corporation (NYSE:NSC) is one of the leading transportation companies in the United States. It operates nearly 19,300 route miles of railway transportation in 22 states and the District of Columbia, serving major container ports in the eastern part of the country. The company is also a principal carrier of coal, automobiles, and automotive parts in the East.
On October 26, Norfolk Southern Corporation (NYSE:NSC) released its financial results for the third quarter of 2022. Its revenue increased by 17% y-o-y to $3.3 billion, while net income increased by 27% y-o-y to $958 million. It generated an EPS of $4.10 for the quarter, beating the analyst estimates by $0.41. The higher-than-expected EPS mainly resulted from a one-time state tax granted to the company that wasn’t reflected in analyst estimates.
Based on the strong financial performance reflected in the quarterly release, Wells Fargo analyst Allison Poliniack-Cusic raised the price target on Norfolk Southern Corporation (NYSE:NSC) shares to $260 from $250 and maintained an ‘Overweight’ rating on the shares.
As of Q2 2022, Norfolk Southern Corporation (NYSE:NSC) shares were held by 44 out of 895 hedge funds tracked by Insider Monkey with a total value of $1.3 billion. Its largest shareholder was Two Sigma Advisors with ownership of 0.84 million shares valued at $190 million.
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4. Delta Air Lines, Inc. (NYSE:DAL)
Number of Hedge Fund Holders: 49
Delta Air Lines, Inc. (NYSE:DAL) is a leading global airline serving more than 200 million passengers on an annual basis across its global network of more than 275 destinations in over 50 countries. The company also provides cargo services through the use of cargo space on its regular flights in addition to chartered cargo flights operated mainly during the covid19 pandemic. The cargo business generated a revenue of $1.03 billion in 2021.
In October, Delta Air Lines, Inc. (NYSE:DAL) reported the financial results for the third quarter of 2022. Its revenue increased by 11% as compared to Q3 2019 to $14.0 billion, while it generated a net income of $695 million.
Following the earnings release, Cowen analyst Helane Becker upgraded the rating for Delta Air Lines, Inc. (NYSE:DAL) shares to ‘Outperform’ from ‘Market Perform’ with a price target of $54 for the shares.
According to the Insider Monkey data on 895 leading hedge funds, 49 hedge funds were long Delta Air Lines, Inc. (NYSE:DAL) shares as of Q2 2022, with the total shares held by hedge funds valued at $887 million. Ken Griffin’s Citadel Investment Group was the largest hedge fund shareholder on record.
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3. CSX Corporation (NYSE:CSX)
Number of Hedge Fund Holders: 63
Based in Jacksonville, Florida, CSX Corporation (NYSE:CSX) is a leading transportation services provider with a railroad network extending to 20,000 route miles, connecting customers to major ports, distribution centers, and every major metropolitan area in the eastern United States.
On October 20, CSX Corporation (NYSE:CSX) released its financial results for the third quarter of 2022. Its revenue increased by 18% y-o-y to $3.9 billion, while net income increased by 15% y-o-y to $1.1 billion. It generated a normalized EPS of $0.52 for the quarter, exceeding the consensus estimates by $0.03.
On October 24, Deutsche Bank analyst Amit Mehrotra lowered the price target for CSX Corporation (NYSE:CSX) shares to $36 from $41 but maintained a ‘Buy’ rating for the shares.
CSX Corporation (NYSE:CSX) is among the favorite freight stocks of hedge funds, with 63 of the 895 hedge funds tracked by Insider Monkey holding its shares valued at a whopping $5.1 billion. Soroban Capital Partners is its biggest shareholder with ownership of 52.6 million shares valued at $1.5 billion.
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2. FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Holders: 63
Memphis, Tennessee-based, FedEx Corporation (NYSE:FDX) provides transportation, e-commerce, and business services. Its business segments include FedEx Express – offering express delivery services across the world, FedEx Ground – small-package ground delivery services provider in North America, and FedEx Freight – less-than-truckload freight transportation services provider in North America.
In September, FedEx Corporation (NYSE:FDX) released its financial results for the quarter ended August 31, 2022. Its revenue increased by 6% y-o-y to $23.2 billion, while its net income declined by 21% y-o-y to $875 million. The normalized EPS was recorded at $3.44 for the quarter, missing the consensus by $1.70.
On October 11, Credit Suisse analyst Ariel Rosa lowered the price target on FedEx Corporation (NYSE:FDX) shares to $205 from $236 and maintained an ‘Outperform’ rating on the shares.
As of Q2 2022, 63 of the 895 hedge funds tracked by Insider Monkey were long FedEx Corporation (NYSE:FDX), holding shares worth $1.8 billion. Ken Griffin’s Citadel Investment Group was the largest shareholder.
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1. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 65
Omaha, Nebraska-based Union Pacific Corporation (NYSE:UNP) is a leading American transportation company operating over 32,000 route miles of railway network covering 23 states across the western two-thirds of the United States.
On October 20, Union Pacific Corporation (NYSE:UNP) released the financial results for Q3 2022. Its total operating revenues increased by 18% y-o-y to $6.6 billion, while net income increased by 13% y-o-y to $1.9 billion. The company reported a normalized EPS of $3.05 for the quarter and narrowly missed the analyst consensus by $0.01.
On October 21, Argus analyst John Eade revised the price target on Union Pacific Corporation (NYSE:UNP) shares to $225 maintained a ‘Buy’ rating on the shares. The analyst holds a bullish sentiment for the railroad operator based on the company’s history of share buybacks and regular dividends. The analyst believes that the recent underperformance by the stock compared to the market offers a buying opportunity.
As of Q2 2022, Union Pacific Corporation (NYSE:UNP) is the most sought-after freight stock among the 895 hedge funds tracked by Insider Monkey as 65 of these hedge funds held shares in the railway company, valued at $6.4 billion. Ken Fisher’s Fisher Asset Management was its largest hedge fund shareholder with ownership of 5.3 million shares valued at $1.1 billion.
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