The global supply chain was hammered during the pandemic by high costs, lengthy delays, crowded ports, and shipping container shortages. However, the industry has since evolved, as witnessed by the significant influx of new capital, players, and technologies and an updated, defensive understanding of the supply chain.
Moreover, IDC analysts predicted that 50% of companies would have implemented more balanced multi-shoring sourcing strategies to address risk better, resulting in a 10-percentage-point improvement in supply reliability. Such strategies could boost the logistics industry’s prospects.
Furthermore, increased e-commerce activity should boost the industry’s growth. This is attributed to online retail channels providing convenient home delivery options. According to a report by Research and Markets, the global logistics market is expected to grow at a CAGR of 4.6% to reach $6.80 trillion by 2028.
Against this backdrop, it could be wise to add fundamentally sound logistics stocks Kuehne + Nagel International AG (KHNGY), Universal Logistics Holdings, Inc. (ULH), and Radiant Logistics, Inc. (RLGT) to your portfolio this month.
Kuehne + Nagel International AG (KHNGY)
Based in Schindellegi, Switzerland, KHNGY provides global integrated logistics services and operates through Sea Logistics; Air Logistics; Road Logistics; and Contract Logistics segments. The company offers less-than-container load, reefer and project logistics, cargo insurance, and more.
On December 14, 2022, KHNGY introduced a new air freight solution to cater to the special needs of global semiconductor supply chains. With a robust air freight capacity, security solutions, and the new quality standard, “SemiconChain,” as the fundamental aspects of the service would allow all industry stakeholders to construct dependable and agile supply chains.
KHNGY’s customers should benefit from enhanced visibility, security, fewer risks, and automated operations with the new air logistics service.
Moreover, on December 6, the company entered into a long-term agreement for a new airside facility strategically located in the airport zone of Johannesburg, South Africa's OR Tambo International Airport. KHNGY would provide customers with a suite of logistics solutions for project-specific charter inbound and outbound shipments.
The facility's proximity to the charter parking area would allow the company to offer distinctive dollies and in-person visibility resources, considerably lowering the possibility of shipment claims and errors during ground handling.
KHNGY’s trailing-12-month net income of 7% is 7% higher than the industry average of 6.54%. Also, the stock’s trailing-12-month ROCE, ROTC, and ROTA are 87.39%, 50.66%, and 19.27% compared to the industry averages of 13.99%, 6.76%, and 5.28%, respectively.
For the third quarter that ended September 30, 2022, KHNGY’s net turnover increased 16.4% year-over-year to CHF 9.97 billion ($10.76 billion). Its gross profit grew 6.6% from the year-ago value to CHF 2.71 billion ($2.93 billion), while its EBITDA came in at CHF 1.12 billion ($1.20 billion), up 14.2% from the previous year’s quarter.
Also, the company’s earnings and earnings per share stood at CHF 688 million ($742.35 million) and CHF 5.45, indicating a 19% and 17.7% year-over-year improvement, respectively.
The consensus revenue estimate of $41.24 billion for the fiscal year that ended December 2022 indicates a 15.7% year-over-year improvement. Shares of KHNGY have gained 10.5% over the past month to close the last trading session at $50.61.
KHNGY’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a Quality grade of A and a Value grade of B. In the A-rated 16-stock Air Freight & Shipping Services industry, it is ranked #3.
Beyond what we stated above, we also have KHNGY’s ratings for Sentiment, Stability, Growth, and Momentum. Get all KHNGY ratings here.
Universal Logistics Holdings, Inc. (ULH)
ULH offers logistics and transportation solutions. It provides truckload services, domestic and international freight forwarding, and final mile and ground expedite services. The company serves the automotive, steel, oil and gas, alternative energy, and manufacturing industries and other transportation companies.
ULH’s trailing-12-month EBITDA margin of 14.33% is 9.7% higher than the industry average of 13.07%. Moreover, its trailing-12-month ROCE, ROTC, and ROTA of 43.08%, 16.02%, and 12.62% compare to the industry averages of 13.99%, 6.76%, and 5.28%, respectively.
For the third quarter that ended October 1, 2022, ULH’s total operating revenues increased 13.5% year-over-year to $505.69 million, and its income from operations grew 317.4% from the year-ago value to $69.78 million. The company’s income before income taxes stood at $64.83 million, representing a rise of 376.6% year-over-year.
Also, ULH’s net income rose 371.9% from the prior year’s period to $48.48 million, while its EPS came in at $1.84, up 384.2% year-over-year.
Analysts expect ULH’s revenue to increase 15.4% year-over-year to $2.02 billion for the fiscal year that ended December 2022. The company’s EPS for the same year is expected to rise 90.3% from the previous year to $6.40. Moreover, ULH surpassed its consensus estimates in both trailing quarters.
The stock has gained 15.5% over the past month and 138% over the past year to close the last trading session at $39.42.
ULH’s solid fundamentals are apparent in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
ULH has a Growth grade of A and a Value grade of B. It has topped the 16-stock Air Freight & Shipping Services.
In addition to the POWR Ratings I’ve just highlighted, you can see ULH ratings for Sentiment, Stability, Quality, and Momentum here.
Radiant Logistics, Inc. (RLGT)
RLGT is a third-party logistics company that provides logistical and multimodal transportation services. It offers domestic (air, ground, and specialized services) and international (ocean, air, and import and export management) services. The business also offers supply chain services.
On October 5, 2022, RLGT acquired the operations of Cascade Enterprises of Minnesota, Inc. RLGT's founder and CEO, Bohn Crain, said: "The Cascade transaction and our long-standing partnership with Tom and his team are significant to the continued evolution of Radiant." The deal is indicative of the broader market opportunity accessible to RLGT.
The stock's trailing-12-month ROCE, ROTC, and ROTA are 23.52%, 11.09%, and 7.10% compared to the industry averages of 13.99%, 6.76%, and 5.28%, respectively. Furthermore, RLGT’s trailing-12-month asset turnover ratio of 3.03x is 278.5% higher than the 0.80x industry average.
Based on the preliminary results for the quarter that ended September 30, 2022, RLGT’s revenues stood at $330.97 million, while income from operations and adjusted EBITDA came in at $10.90 million and $18.52 million, respectively. Moreover, the company’s net income and EPS stood at $8.13 million and $0.16, respectively.
Analysts expect RLGT’s EPS to grow 24.6% per annum over the next five years. Also, the company surpassed its consensus estimates in all four trailing quarters, which is impressive. Shares of RLGT have gained 11% over the past month to close the last trading session at $5.75.
RLGT’s POWR Ratings reflect its solid prospects. The stock has an overall rating of B, equating to Buy in our proprietary rating system.
RLGT has a B grade in Growth, Value, and Sentiment. Within the same industry, it is ranked #2 of 16 stocks.
To see additional POWR Ratings for Quality, Stability, and Momentum for RLGT, click here.
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KHNGY shares were trading at $50.16 per share on Tuesday morning, down $0.45 (-0.89%). Year-to-date, KHNGY has gained 7.46%, versus a 6.98% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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