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J.B. Hunt to Buy Cory 1st Choice Home Delivery, Stock Gains

Zacks Equity Research

In a bid to strengthen its presence in the fast-evolving market of bringing bulky goods straight to the customer’s doorstep (Final Mile Delivery), J.B. Hunt Transport Services JBHT has agreed to buy a New Jersey-based home-delivery firm for $100 million. The Lowell, AR- based company has inked a definitive agreement to acquire Cory 1st Choice Home Delivery through its subsidiary — J.B. Hunt Transport.

Cory focuses on offering home delivery services of large-scale goods in the continental United States and U.S. territories. It utilizes 14 warehouses and other customer-owned facilities for this purpose. Notably, Cory, with the help of more than 1,000 independent contractors, carriers and delivery drivers strives to complete in excess of 2 million deliveries per year.

Naturally, its acquisition, which will be funded via J.B. Hunt’s existing revolving credit facility, on completion, will fortify the company’s Final Mile operations. Final Mile functions as a sub-group of this trucking company’s Dedicated Contract Services division. Expansion of the unit, that handles big and bulky deliveries at J.B. Hunt, can be gauged from the fact that it will cover 100 locations with more than 3.1 million square feet in terms of warehouse and facilities space.

J.B. Hunt’s decision to expand its presence in this lucrative space has found favor among investors. Consequently, the stock gained 1.1% on Jan 9.

J.B. Hunt Transport Services, Inc. Price


J.B. Hunt Transport Services, Inc. Price | J.B. Hunt Transport Services, Inc. Quote


Market for Last-Mile Deliveries Attracting Significant Interest

With the online shopping space growing by leaps and bounds with every passing day, it is not a surprise that growth in last-mile deliveries are outpacing traditional freight. The lucrativeness of this avenue can be made out from the fact that it generated revenues of $8.9 billion in 2018. The figure reflected a 10% year-over-year increase, according to a Bloomberg report.

With transportation companies competing to bring bulky online orders to the homes of consumers, it is natural that these are looking to bolster their capabilities pertaining to final-mile delivery. J.B. Hunt’s decision to acquire Cory is its second move in a short span of time aimed at fortifying its operations in this highly sought-after area. This trucking company took over Special Logistics Dedicated in 2017, in a bid to expand its pool distribution and fulfilment delivery operations.

In 2018, Ryder System R, one of the world's largest providers of integrated logistics and transportation solutions, acquired MXD Group for $120 million. Through this move, aimed at expanding its capabilities pertaining to shipping of bulky items to homes of consumers, Ryder gained access to an additional 109 e-commerce fulfilment facilities across the United States and Canada. Additionally, this Florida-based company has obtained a network of 72 third-party agent facilities through the buyout. XPO Logistics XPO is also constantly looking to bolster its operations pertaining to last-mile services through acquisitions.

Zacks Rank & a Key Pick

J.B. Hunt carries a Zacks Rank #3 (Hold), at present. A better-ranked stock in the Zacks Transportation Sector is Spirit Airlines SAVE, flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Spirit Airlines have rallied more than 32% in a year’s time.

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