We recently compiled a list of the 11 Best Logistics Stocks to Invest in Right Now. In this article, we are going to take a look at where Norfolk Southern Corporation (NYSE:NSC) stands against the other logistics stocks.

The Logistics Industry: Current Dynamics

Logistics companies transporting goods around the world continue to navigate uncertainty as Donald Trump plans to impose 60% tariffs on goods from China and 25% tariffs on goods from Mexico and Canada. As reported by CNBC, Dave Bozeman, the new CEO of C.H. Robinson, sees an opportunity in Trump tariffs. The logistics giant is a top 3 carrier on the China-U.S. freight lane also carrying nearly 10% of the freight on the US-Mexico lane. Citi transportation analyst Ari Rosa considers the company’s business diversified enough to work through tariffs despite its global forwarding business being very exposed to China. The CEO’s stance on the tariffs was quite positive as well, as he stated:

“The freight still has to move. It might just move at a different starting point, and we would still be there to move that.”

In an interview with CNBC, Ravi Jakhar of the firm Allcargo Group, the world’s LCL consolidation leader and India’s largest integrated logistics solutions provider, reiterated optimism regarding the Trump tariff risks. He mentioned how over 4 years ago when sanctions came in from the Trump administration, the firm saw an increased import into its Vietnam offices from China and improved export out of Vietnam, alongside increased momentum in Indonesia and the Philippines. In his opinion, whether it is a short-term tariff sanction or a long-term structural trend, trade flows could change in terms of origins and destinations but the overall trade flows would remain robust as long as manufacturing and consumption are there.

As of what’s recent in the logistics landscape, the holiday season is in full swing, with holiday surcharges playing a crucial role in profitability for logistics companies since they charge their big retail customers extra fees on a per-package basis compared to their June volume during the busy holiday season. The increase in e-commerce is also benefitting such logistics providers and full truckload carriers. Simultaneously, an increase in freight in anticipation of future tariffs is also being seen.

A survey from Merchants Fleet and Atomik Research of decision-makers in organizations that typically transport freights of consumer-packaged goods throughout the US revealed that 88% saw AI as useful in alleviating pressures on their fleets this peak delivery season. AI’s data-driven capabilities are to streamline operations and decision-making, with the majority of the respondents citing supply chain optimization as a primary benefit. Other advantages mentioned were improved route optimization, enhanced inventory management, and reduced downtime by identifying maintenance issues with fleet vehicles.

Our Methodology:

In order to compile a list of the 11 best logistics stocks to invest in right now, we went through stock screeners, ETFs, and media reports to make a list of relevant stocks. Moving on, we shortlisted the top 11 stocks from our list which had the highest number of hedge fund holders. The 11 best logistics stocks to invest in right now have been arranged in ascending order of their hedge fund holders as of Q3 2024.

At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Norfolk Southern Corporation (NYSE:NSC)

Number of Hedge Funds: 47

Norfolk Southern Corporation (NYSE:NSC) is one of the premier transportation companies in the United States that specializes in rail freight services. The company has been moving the goods and materials that power the US economy since 1827. Norfolk Southern Corporation operates in 22 states with connections across the globe.

The transportation company has the privilege of having the most extensive intermodal network in the eastern United States. Other than a franchise built for growth, Norfolk Southern Corporation has a powerful rail network that serves the fastest-growing segments of the American economy. It serves a majority of the national population and manufacturing base, with connections to every major container port on the Atlantic coast in addition to major ports in the Gulf of Mexico and Great Lakes.

Norfolk Southern Corporation (NYSE:NSC) remains well positioned for long-term value creation as it successfully delivered sequential and year-over-year margin improvement in the third quarter of 2024 which places it back on track to achieve its adjusted operating ratio targets for the second half and full year 2024. The company achieved 3% higher revenue and 23% higher adjusted earnings per share compared to the last year.

Overall NSC ranks 5th on our list of the best logistics stocks to invest in right now. While we acknowledge the potential of NSC as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NSC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article is originally published at Insider Monkey.