Should You Invest in J.B. Hunt?

PHOTO CREDIT: J.B. Hunt

OVERVIEW

J.B. Hunt Transportation Services Incorporation is a freight and logistics company. It operates through Dedicated Contract Services, Intermodal, Integrated Company Solutions, and Truckload. The company owns and maintains thousands of trucks and other transport equipment like trailers and containers. The company was founded in 1961.

Why You Should?

  1. J.B. Hunt has seen strong demand for its products before this pandemic. As logistic and freight services were on the rise, J.B. Hunt saw rising demand across all of their segments of operation. This strong demand will benefit the company in the long term.
  2. J.B. Hunt offers its customers several ways to transport products. Customers can use the company’s intermodal to transfer freight from Point A to Point B, they can use the company’s Dedicated Contracted Services to design supply chains and fulfill logistic requirements, they can use Integrated Capacity Solutions as a regular freight service, and they can also use Truckload to transport other freight.
  3. J.B. Hunt has seen rising demand over the past couple of years as mentioned before. The company has seen rising revenues and profits over the past financial years and has developed a stronger balance sheet. This will help the company go through many times of weak economies and allow them to further grow. In the financial year of 2019, the company reported revenues of around 9.2 billion and profits of over 515 million. Both of these metrics are up from the financial year of 2018 when the company reported revenues of around 8.6 billion and profits of over 489 million. (PHOTO CREDIT: Yahoo Finance)

Why You Should Not?

  1. J.B. Hunt suffers through weak economic times because their freight and logistics business sees a dip in demand. The COVID-19 Pandemic has weakened the economy and J.B. Hunt has seen a drop in demand for its products. This will negatively impact the company until the economy strengthened again.
  2. J.B. hunt faces competition from several players. Rail companies like Union Pacific and other logistical companies like FedEx and Old Dominion Freight Line might hurt the company’s future growth as consumers have tons of options to pick from.
  3. Trade Tensions will hurt the business of J.B. Hunt. Because the company transports some of its freight internationally, it will negatively impact the company’s volumes. Consumers will see rising costs to trade internationally due to tariffs and other duties. J.B. Hunt will see a reducing volume of freight which will hurt the company.

MY OPINION

I think that J.B. Hunt is a good long term investment due to the rising demand for its freight and logistics products and strong financials. However, trade tensions and a weak economy will hurt the company in the future.

--

--

--

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Wells Fargo Innovations in Banking to Compete with Fintech

Travis Kalanick Resigns as Uber CEO: Lessons in How Not to Run a Company

The Rise of the Fashion Social Network (2012)

Revenue Management System: In-house or Outsourced?

TakeOver 2018: Building on Last Year’s Success

Analysis of Revenue & Profit Margin to Increase Profit in Global Bike Inc. United States — Part 1

Business model innovation

Japan: a Good Fit for IIoT

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

More from Medium

You Need to Write Now

Disrespected: Female Professional Athletes Are Underpaid

When the Joint Stops Smoking Itself.

How to hack your founder's journey? Founder.University is the key!