3 Trucking Stocks to Buy This Month

The skyrocketing demand for raw materials, auto parts, and other goods has intensified the supply chain crisis, leading to a surge in demand for trucking transportation. With the economy opening up, the demand for truck-based transit is expected to continue rising. According to American Trucking Associations, a record 80,000 additional truck drivers are now needed to meet the nation’s freight demand. The situation has drawn investors’ attention to this space, as is in-part evidenced by the iShares Transportation Average ETF’s (IYT) 7.3% gains over the past month versus the SPDR S&P 500 ETF’s (SPY) 2.9% returns.

Furthermore, despite being hit by the COVID-19 pandemic, the global transportation industry is expected to grow at a 3.4% rate through 2027. Also, contract truckload volumes increased 3% year-over-year this month, while spot market volumes were approximately 120% higher.

Given this backdrop, we think it could be wise to bet on fundamentally strong trucking stocks Ryder System, Inc. (R), ArcBest Corporation (ARCB), and Daseke, Inc. (DSKE).

Ryder System, Inc. (R)

R operates as a logistics and transportation company worldwide. The Miami, Fla., company operates through three segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS).

On October 19, 2021, R and Gatik announced a multi-year partnership to establish an autonomous logistics network for Gatik’s customers in the U.S. and Canada. This partnership leverages R’s expertise in fleet servicing and maintenance to commercialize autonomous delivery at scale.

For its fiscal second quarter, ended June 30, 2021, R’s total revenues increased 25.7% year-over-year to $2.38 billion. The company’s net earnings came in at $149.1 million, versus a $74.1 million loss in the prior year period. Also, its EPS was $2.77, compared to a $1.42 loss in the year-ago period.

R’s revenue is expected to be $9.34 billion in its fiscal year 2021, representing a 10.9% year-over-year rise. The company’s EPS is expected to grow 2,903.7% in the current year to $7.57. Also, it surpassed the Street’s EPS estimates in three of its four trailing quarters. Over the past nine months, the stock has gained 36.6% in price to close yesterday’s trading session at $91.02.

It’s no surprise that R has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting. In addition, it has an A grade for Growth and a B grade for Value, Momentum, and Quality.

R is ranked #3 of 89 stocks in the B-rated Industrial - Services industry. Click here to see the additional POWR Rating for R (Stability and Sentiment).

Click here to check out our Industrial Sector Report for 2021

ArcBest Corporation (ARCB)

ARCB is a leading logistics company with creative problem solvers that deliver innovative solutions, including freight transportation and integrated logistics services. The Fort Smith, Ariz., company operates through three segments: Asset-Based; ArcBest; and FleetNet.

On September 29, 2021, ARCB agreed to acquire MoLo Solutions, LLC, a Chicago-based truckload freight brokerage. With the acquisition, ARCB is set to be among the top 15 U.S. truckload brokers, with access to more than 70,000 carrier partners.

ARCB’s revenues increased 51.3% year-over-year to $948.97 million in the second quarter ended June 30, 2021. Its operating income came in at $74.30 million, up 263.8% year-over-year. Its net income for the quarter was $60.98 million, up 284% year-over-year. And its EPS came in at $2.27, up 272.1% from the year-ago period.

Analysts expect ARCB’s revenue and EPS to increase 28.4% and 123.5%, respectively, year-over-year to $3.78 billion and $7.22, in the current year. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 82% in price to close yesterday’s trading session at $89.37.

ARCB’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system.

ARCB has an A grade for Growth, and a B grade for Value, Momentum, and Quality. Within the A-rated Trucking Freight industry, it is ranked #2 of 22 stocks. Click here to see the additional POWR Ratings for Sentiment and Stability for ARCB.

Daseke, Inc. (DSKE)

Addison, Tex.-based DSKE provides transportation and logistics solutions focusing on flatbed and specialized freight in the United States, Canada, and Mexico. It operates through two segments, Flatbed Solutions, and Specialized Solutions.

On October 22, 2021, Jonathan Shapka, DSKE CEO, said, “Prospectively, we plan to deliver meaningful value to our shareholders by continuing to leverage our scale and our differentiated capabilities, while also maintaining a keen focus on advancing our operational improvement initiatives.”

DSKE’s total revenue increased 13% year-over-year to $424.6 million for its fiscal third quarter, ended September 30, 2021. Its income from operations came in at $40.4 million, up 43.8% year-over-year. Its net income was t $19.7 million, up 71.3% from the year-ago period, while its EPS increased 76.5% year-over-year to $0.30.

For its fiscal year 2021, DSKE’s revenue and EPS are expected to grow 6% and 3,800%, respectively, year-over-year to $1.54 billion and $0. 78.Over the past nine months, the stock has gained 66.2% in price to close yesterday’s trading session at $9.59.

DSKE’s strong fundamentals are reflected in its POWR ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system.

In addition, it has a B grade for Value, Momentum, and Quality. DSKE is ranked #7 in the Trucking Freight industry. Click here to see DSKE’s ratings for Growth, Stability, and Sentiment as well.

Note that DSKE is one of the few stocks handpicked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Stocks Under $10 portfolio. Learn more here.

R shares were trading at $87.17 per share on Wednesday afternoon, down $3.85 (-4.23%). Year-to-date, R has gained 44.50%, versus a 23.41% rise in the benchmark S&P 500 index during the same period.

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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