The logistic stocks would be a decent bet for the long run as online delivery services are emerging faster than ever.
The logistics firms are expected to have more workload this year than in 2020.The global pandemic had affected the operations of logistic firms—just like any other company that works on-ground.
However, the logistic operations have started to pick up face following lockdowns and social limitations. Moving people and things from place to place is a big business today. And, in the coming years, it’s going to get even bigger.
The evolution of companies like Amazon, eBay, Alibaba, and others have increased the demand for logistic operation and services, in the past few years. As we head forward, logistic services would be in high demand with an increase in rising exports, domestic consumption, rising container volumes, and increased investments in the new facilities.
For instance, the EV industry is one of the biggest industries that would help the logistic market rise alongside it. The rising deliveries of electric vehicles all over the world would increase freight and logistic operations. If you are looking for a potential logistic stock to invest in, here are the three best in the market.
United Parcel Service (UPS)
Uniter Parcel Service (UPS) is one of the biggest logistic firms and a giant in package delivery with over $143 billion in market cap. The company has seen a rise in its activities, with the surge in e-commerce. UPS provides its services all over the world by land, sea, and air. Moreover, it also has a chain of stores, drop boxes, and customer centers for the ease of customers.
The company has been increasing its revenues; however, the profit margin has shrunk over the past few years. That’s a worrying point for investors. The CEO of UPS, Carol Tome is committed to improving the margins. Tome argues that the revenue growth is now exceeding volume growth with the help of management’s plan to enhance the quality of its earnings.
Among the company’s plan is to reduce its non-operating expenses up to $500 million in 2021. UPS will be working on its margin this year and that’s the key point for investors to note in the next couple of quarters.
Danaos Corp. (DAC)
Danaos Corp. (DAC) is one of the largest independent owners of modern, large-size containerships. The company charters its containerships on long-term contracts to various large liner firms worldwide, at a fixed rate.
The company is set to release its fourth-quarter 2020 outcomes on Feb. 16, 2021. Over the past three months, Zacks has raised its earnings estimate by 2.25%. And, that’s more likely to happen, as the company has surpassed the last four quarter estimates, with an average of 14%.
Whereas, the annual revenues for this year are expected to reach $557 million, according to an analyst. If Danaos reports revenues as per the estimates, it would reflect a substantial increase of 23%.
The consensus estimates are high with increasing demand for logistic services. So, Danaos Corp. (DAC) is a logistic stock with a long-term investment opportunity.
ArcBest Corp. (ARCB)
ArcBest Corp. (ARCB) is a holding company, dealing in freight transportation services and solutions. The company operates through three core business segments which includeArcBest, Asset-Based, and FleetNet.
The company recently updated its fourth-quarter results. The earnings were recorded at $0.97 per share, beating the consensus estimate of $0.88. Whereas, the revenue for the ArcBest segment was around $816.41 million, surpassing estimates by 2.68%.
Furthermore, the company is anticipated to earn $0.55 per share, which would reflect a whopping increase of 52.78%. While the full-year earnings are forecasted at $4.03, up by 24% year-over-year.
