Logistics refers to processes that allow products to get from point A to point B. Investors have long realized the value that Logistics firms provide to the economy overall. Recent supply chain issues have renewed that focus on firms and stocks that populate the space.
Companies that apply technology to streamline the supply of goods are in particular focus. Investors understand that technology, in particular artificial intelligence, holds the potential to create a lot of value. The companies that apply this technology successfully promise strong returns and rising share prices. Increased efficiency and decreased waste results in increasing returns for investors. Let’s look at a few of those stocks.
Manhattan Associates (MANH)
Manhattan Associates (NASDAQ:MANH) makes software used to manage the supply chain and serves multiple markets. Those markets include retail, wholesale, distribution and manufacturing. Thus, the company serves a supply chain industry that is well aware of its need to adapt. the supply chain crisis put that truth into stark contrast.
In 2023, Manhattan Associates really capitalized on the e-commerce boom. Its shares have risen by approximately $100 to their current price of around $220. The company has proven particularly Adept at handling the intricate e-commerce supply chains of retail firms. Manhattan Associates has proven to its retail partners that it has the ability to adapt to the unique artificial intelligence requirements that are in high demand for retail firms.
Third quarter revenues reached $238.4 million up from $198.1 million a year prior. Earnings per share rose to 79 cents compared to 47 cents a year earlier. Those strong results are a clear indication that Manhattan Associates continues to adapt to the rapidly evolving supply chain environment.
Per its website, Trimble (NASDAQ:TRMB) provides technology and data analytics that helps firms move goods for a better quality of life. It is one of several lesser known supply chain stocks that analysts and pundits are increasingly interested in.
Let’s start with ratings and potential returns because they may indeed be the most interesting piece of information for investors to know about Trimble. The company is currently rated as being overweight and is priced around $42. However the analyst consensus is that Trimble shares are worth more than $58.
In the third quarter the company saw its revenues increase by 8%, reaching $957.3 million. The company produced $74.9 million in net income from those revenues. Meanwhile, executives were focused on Trimble’s record annualized recurring revenue of $1.94 billion and record margins of 65%. Again, Trimble is lesser known among supply chain stocks, but is absolutely one to consider given its ability to continually grow and provide analytics that improve supply chains for firms across all industries.
UPS (NYSE:UPS) is currently the second largest transportation stock by market capitalization behind only Union Pacific (NYSE:UNP). In the future, UPS will retake the number one position and only fell to second place because 2023 has been difficult.
Let’s start by looking at the company’s fundamentals because they should underpin the basis of any investment. UPS’s third quarter results don’t appear very encouraging at first glance. Revenues fell from $24.2 billion a year ago to $21.1 billion in the third quarter of 2023. Earnings per share fell by nearly 48% during the same period.
However, there’s a silver lining in the news. Primarily, there are strong factors suggesting that the worst is over for the economy. The U.S. Federal Reserve continues to signal that its series of rate hikes is over. Recent inflation data showed that its efforts have produced more rapid cooling of inflation than was expected. The thrust of all of that information is that the macroeconomic situation is looking positive. In turn, investors should reasonably anticipate an increase in overall activity. That will benefit UPS because an increase in activity will flow through the company in the form of increased delivery of goods.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.