Inflation’s failure to cool down in May prompted a more aggressive crackdown by the Fed. For the common man, this roughly translates to higher prices for goods and services as well as a higher cost of borrowing for a home, car, or any essential expenditure. Not to mention the fear of the economy slipping into a recession, which comes with another slew of issues.
Naturally, investors are feeling jittery about picking the right stocks that can ensure their money is safe. Going by this sentiment, many are selling off their investments altogether. However, the key is to be open to the possibility of the market falling further, pulling down the net worth of investors, and looking beyond the turbulence into the long term.
In this regard, expert opinion and activities come in handy to better understand which stocks show possibilities of growing and how much value they are expected to return.
Keeping this in mind, we regularly highlight the expertise and recommendations of the world’s top experts, as we believe that this will ease the investment decision-making process for investors at this point.
In today’s Expert Spotlight piece, we celebrate one of the top minds of Wall Street, whose stock recommendations and analyses have helped investors make fruitful decisions. We will also discuss two of his recently recommended stocks.
Today’s Expert: Jason Seidl
Our expert of the day, Jason Seidl, is the managing director of Industrials – Airfreight & Surface Transportation at Cowen & Co. (COWN), where he has worked for about nine years. In more than two decades of his career, he has grown to be known for his successful stock ratings and accurate company earnings per share projections.
In 2020, Seidl was awarded the TipRanks analyst award, a feat that is proudly mentioned in his analyst profile on the Cowen & Co. website.
This five-star rated analyst is ranked #11 among all 7,890 analysts tracked on TipRanks, and #21 among 20,027 overall experts in the TipRanks universe. This rating was generated as part of a complex Star Ranking system that takes an expert’s success rate into account, along with the average returns generated per transaction or rating and statistical significance, which increases with each rating.
The analyst has a success rate of 69%, with an average return of 23.8% over the past year. Furthermore, his recommendations generated an alpha of 11.7% over the S&P 500 index and 14.2% over the services sector performance in the past year.
Seidl’s most accurate stock recommendation was Daseke (DSKE) in the year between May 7, 2020, and May 7, 2021, during which the stock had gained 327.7%.
In the past 30 days, Seidl has made five stock ratings. Let us have a look at two of them.
Hub Group (NASDAQ: HUBG)
Illinois-based transportation management company Hub Group was the most recent stock rated by Seidl. Hub’s bright green containers have been a common sight on U.S. roads since 1971. Ever since then, the company has expanded its offerings by making various acquisitions and investments in technology.
Supply-chain disruptions have created havoc across industries. However, high freight demand and innovative supply-chain solutions have helped the company keep itself afloat and even perform better than expectations in the first quarter. Moreover, it continues to navigate headwinds and has even upped its estimates for its 2022 performance.
Moreover, its strong balance sheet is another point to highlight. As of March 31, the company had a net cash position of about $32 million (measured as cash and cash equivalents minus long-term debt). This strength will help the company maintain a strong budget for technological and shipping innovations and other growth strategies.
Wall Street is cautiously optimistic about Hub with a Moderate Buy consensus rating, based on 10 Buys and six Holds over the past three months. The average Hub Group price target of $116.07 implies 73.2% upside potential.
Seidl maintained a Buy rating on the stock. A look into his history of rating this stock will give us all the more confidence in his convictions. Out of the 18 times that Seidl has rated Hub, 14 have been successful, and with each rating, the stock has generated an average profit of 15.3%.
XPO Logistics (NYSE: XPO)
Freight transportation company XPO Logistics has lost around 40% of its value so far this year, succumbing to macroeconomic headwinds, including supply chain disruptions. However, it is forging a solid path to recovery and growth.
It recently entered into a high-profile partnership with Google Cloud to build a more efficient supply chain. Moreover, steering its business in a new direction, XPO recently registered to spin off its asset-light brokered transportation platform in a bid to create two separate, publicly traded companies. These companies will have immense growth prospects in North America.
Notably, spinning off some of its assets to other firms or turning them into separate public companies is not new to XPO. Last year, the company spun off its contract logistics business into a separate publicly-traded company called GXO Logistics (GXO). Moreover, in March this year, it divested its tech-driven brokered transportation services from its LTL (less-than-truckload) business.
These moves are allowing the company to create a better focus on its various units and save the costs of running a business that is not creating much value.
After the March announcement, Seidle commented, “We like the announcement and see a core LTL-play offering potential multiple expansion for the company while using the asset sale as a way to quickly reduce debt load.”
Seidl has kept his bullish stance on the XPO stock for the past two years. He has had 58% success with his ratings of XPO, generating a profit of 19.9% on each rating.
Wall Street is also optimistic about the stock, with a Strong Buy consensus rating based on 15 Buys and one Hold. The average XPO Logistics price target of $81.94 implies 77.2% upside potential.
Supply-chain issues are here to stay – likely at least for a few more months before they are effectively mitigated. However, thanks to their efforts, HUBG and XPO both are expected to have a meaningful hand in helping ease the pressures that have been hurting industries.
Moreover, given Seidl’s track record, his strong convictions can be a great help when considering investment decisions in these uncertain times.