Freight logistics has become a massive business and a key determinant of growth as the economy pivots to e-commerce, just-in-time inventory management and supply chain reshoring, asserts growth stock specialist Adam Johnson, editor of Bullseye Brief.

On the surface, logistics looks an exercise in getting products from one place to another. Go deeper and it’s a complex ballet incorporating artificial intelligence to route products faster, more reliably and at lower cost.

Several operators dominate the market, but one in particular stands out. Its proprietary software platform connects millions of shippers and truckers in real-time, while its customizable less-than-truckload solutions streamline operations for thousands of customers worldwide. It’s a great example of American Ingenuity operating both here and abroad.

XPO Logistics, Inc. (XPO) is an exceptional transportation and logistics company, ranking as the second largest truck broker in the world and the third largest less-than-truckload (LTL) operator in North America. The company has significantly beaten earnings estimates for twelve consecutive quarters and recently raised earnings guidance for 2022.

Strong results reflect accelerating fundamentals around recovery and e-commerce, as well as company specific initiatives to improve operating metrics and expand the business. Shares have corrected with the market and now present an attractive entry point for tactical investors.

XPO posted its highest-ever quarterly revenue on February 8th, beating estimates by 37% and prompting management to increase 2022 guidance by 11%. The company’s two operating units are seeing significant volume gains as economic recovery gathers steam, enabling management to increase shipping rates by nearly 6%.

XPO operates two complementary business: Truck brokerage and Less-than-truckload shipping. XPO’s brokerage division ranks as the world’s second largest freight broker. Its strength comes from a unique mobile platform called XPO Connect, which matches shippers and truckers in the same way Uber (UBER) connects riders and drivers. XPO Connect can be managed from a cellphone.

XPO’s less-than-truckload shipping service enables 50k customers like Ford Motor (F) and Archer-Daniels-Midland (ADM) to more effectively manage inventory by moving palletized freight across a network of 771 facilities serving 99% of all zip codes in North America.

I like owning in the upper $60s, which coincides with a one-year support line and the center of a recent downward channel. The stock gapped up following its earnings beat on February 9 and a slight retrenchment would not be out of the question. I’ll buy an initial position, and save some ammo for possible softness.

My target of $125 implies upside of 80%, which could prove conservative if XPO increases its marketshare and/or logistics demand accelerates faster than expected.

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