What Makes Old Dominion Freight Lines (ODFL) a Lucrative Investment?

Pelican Bay Capital Management, an investment management company, released its third-quarter 2025 investor letter. A copy of the same can be downloaded here. PBCM Concentrated Value Strategy returned 7.8% in the quarter, compared to a 5.3% return for the Russell 1000 Value Index. YTD, the fund returned 11.2% compared to 11.6% for the index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, PBCM Concentrated Value Strategy highlighted stocks such as Old Dominion Freight Line, Inc. (NASDAQ:ODFL). Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is a less-than-truckload motor carrier that provides regional, inter-regional, and national less-than-truckload services, as well as expedited transportation. The one-month return of Old Dominion Freight Line, Inc. (NASDAQ:ODFL) was 2.52%, and its shares lost 39.10% of their value over the last 52 weeks. On November 6, 2025, Old Dominion Freight Line, Inc. (NASDAQ:ODFL) stock closed at $137.69 per share, with a market capitalization of $28.938 billion.

PBCM Concentrated Value Strategy stated the following regarding Old Dominion Freight Line, Inc. (NASDAQ:ODFL) in its third quarter 2025 investor letter:

“We replaced Kinsale with Old Dominion Freight Line, Inc. (NASDAQ:ODFL), the undisputed leader in the Less-Than-Truckload (LTL) freight market.

The trucking industry is notoriously competitive and prone to cyclicality. Despite this, over the last three decades, ODFL has built a business with significant competitive advantages protected by real moats.

While most peers struggle to generate a profit, ODFL maintains 20% operating margins and a high 20%+ return on invested capital (ROIC), all while keeping a net cash balance sheet. More importantly, the company is known as the only consistently reliable player in the LTL industry, which allows it to charge a premium price for its service.

This higher pricing power gives ODFL the ability to invest more than peers in its network infrastructure across the economic cycle, including during down markets when other trucking companies must cut capital spending. This willingness and ability to invest through the cycle is the critical differentiator between ODFL and its competition…” (Click here to read the full text)

In another article, we covered Old Dominion Freight Line, Inc. (NASDAQ:ODFL) and shared The London Company Large Cap Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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