J.B. Hunt Transport Services Inc. is on the "art collectors list" of stocks to add to portfolios during this turbulent market period.
The Lowell-based trucking company is one of only 37 stocks that Stephens Inc. recommends buying now. J.B. Hunt and the other companies "will continue to outgrow their peers due to the competitive moat they have built around their business," Stephens said in its research report.
Trucking companies are a critical part of the supply chain supporting the nation's businesses during the economic disruptions caused by the coronavirus.
The 37 companies are being recommended because, according to Stephens, they have favorable long-term growth prospects and their current market valuation makes them a solid purchase. Recommendations cover the financial services, energy, health care, food and grocery, restaurant, industrial and technology sectors.
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"Given [that] market conditions have put all of them on sale to varying degrees, we think investors should take an especially hard look at these 37 companies," Stephens reported.
Stephens analyst Justin Long said J.B. Hunt "is well-positioned relative to its peers given its significant scale and structural advantages."
The analyst predicts long-term growth in the company's two largest segments, intermodal and dedicated, and believes the opportunity from its J.B. Hunt 360 technology initiative is "underappreciated."
A company spokesman declined to comment on the Stephens report.
Stephens set a price target of $131 for the company's stock. J.B. Hunt closed Monday at $93.56, up about 3.9% or $3.50. That beat the Dow Jones Industrial Average, which rose about 3.2% for the day.
To keep goods moving across the nation, the company last week announced plans to pay $500 bonuses to drivers, field operators and customer service facilities personnel.
"All of our employees have gone above and beyond the call to action during this crisis," John Roberts, president and chief executive officer of J.B. Hunt, said in announcing the bonuses. "They have kept pace with the evolving supply chain needs of our customers in the face of great uncertainty."
The Stephens report noted that J.B. Hunt's investment to become a technology leader in the sector will help drive its long-term growth.
"Simply put, we view JBHT as a high-quality business with an attractive multi-year story and feel comfortable putting it on a list of 'art collector' stocks that we would be opportunistically buying on macro-related weakness in the market," the report said.
J.B. Hunt provides several transportation services that include intermodal, dedicated, final mile, truckload and brokerage services.
Business on 03/31/2020