J.B. Hunt Transport Services, Inc (JBHT - Free Report) recently acquired the assets of RDI Last Mile Co. through its subsidiary J.B. Hunt Transport, Inc, in order to expand its rapidly growing Final Mile network (delivery of goods to customer’s doorstep). The company funded the buyout using its revolving credit facility.
Generating annual revenues of $35 million, RDI provides home delivery services of big and bulky products in Northeastern United States. For delivering furniture, the company uses contract carriers.
This acquisition extends J.B. Hunt’s home delivery capabilities, covering more than 104 locations with 3.2 million square feet of warehouse and facilities space.
With the online shopping space growing by leaps and bounds, quite naturally growth in last-mile deliveries (or final mile delivery) is outpacing traditional freight. J.B. Hunt is trying to make the most of this e-commerce boom. To this end, the company is constantly aiming for strategic acquisitions to widen its final mile network.
Previously, in 2019, the company acquired Lowell, AR- based Cory 1st Choice Home Delivery, which strengthened its presence in the fast-evolving market of delivering bulky goods straight to customers’ residences. Prior to that in 2017, it acquired Special Logistics Dedicated in a bid to fortify its pool distribution and fulfillment delivery operations.
Final Mile Services is a division of J.B. Hunt’s Dedicated Contract Services segment. Surging growth in the company’s Final Mile Services is reflected in the performance of its Dedicated Contract Services unit. Revenues from this key unit (generates second largest revenues) rose a whopping 26.2% year over year to $1.98 billion in the first nine months of 2019.
Zacks Rank & Key Picks
J.B. Hunt carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Transportation sector are Forward Air Corporation (FWRD - Free Report) , Marten Transport, Ltd. (MRTN - Free Report) and GATX Corporation (GATX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Forward Air, Marten Transport and GATX have rallied more than 29%, 35% and 22%, respectively, in a year’s time.
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