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Why Landstar System (LSTR) Is A Compelling Investment Case

Alex Smith
·3 minuto per la lettura

If you are looking for the best ideas for your portfolio you may want to consider some of Ensemble Capital's top stock picks. Ensemble Capital, an investment management firm, is bullish on Landstar System Inc (NASDAQ:LSTR) stock. In its Q4 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Landstar System Inc (NASDAQ:LSTR) stock. Landstar System Inc (NASDAQ:LSTR) is a transportation services company. The stock is down 3.2% since the Ensemble Capital's pitch in January 2020. On a year-to-date basis, Landstar System Inc (NASDAQ:LSTR) stock has fallen by 2.1%.

On January 22, 2020, Ensemble Capital had released its Q4 2019 Investor Letter. Ensemble Capital said that Landstar System Inc (NASDAQ:LSTR) stock was flat during the fourth quarter of 2019.

For the quarter ended December 31st, 2019, Ensemble Fund recorded a return of 9.87%, compared to 9.07% of the S&P 500 Index. This brings its 2019 full-year return to 39.55%, compared to 31.49% of the S&P 500 Index.

Let’s take a look at comments made by Ensemble Capital about Landstar System Inc (NASDAQ:LSTR) in the letter.

"Landstar, which provides trucking logistics services, bounced around during the quarter as investors have been trying to get a read on whether the US manufacturing sector is about to rebound, or is stuck in neutral. Modest weakness in truck loads shipped and sharp weakness in revenue per load for Landstar, is indicative of weak demand for moving manufacturing goods around the country. But having owned Landstar for many years, we’re well accustomed to the mini cycles the company goes through. The last time the company posted results as weak as they are currently, was in mid-2016. Over the following year, declining revenue reversed and shot 20% higher with the stock appreciating by 40%. The cyclical behavior of Landstar’s results aren’t lost on the market though, which is why the stock still returned 20% this year even as revenue and earnings declined."

In Q1 2020, the number of bullish hedge fund positions on Landstar System Inc (NASDAQ:LSTR) stock decreased by about 8% from the previous quarter (see the chart here), so a number of other hedge fund managers don't seem to agree with Landstar's growth potential. Our calculations showed that Landstar System Inc (NASDAQ:LSTR) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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Disclosure: None. This article is originally published at Insider Monkey.