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Old Dominion Freight Line (ODFL) Surges 82% YTD: Here's Why

Improved freight market conditions are benefiting Old Dominion Freight Line (ODFL).

This story originally appeared on Zacks

Shares of Old Dominion Freight Line ODFL have been displaying an uptrend on the bourses year to date. The ODFL stock has surged 82% so far this year, outperforming its industry’s 55.6% growth.

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Zacks Investment ResearchImage Source: Zacks Investment Research


Let’s take a look at the factors that are working in favor of the stock.

Solid Rank: Old Dominion currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: Upward estimate revisions raise optimism for a stock’s prospects. Old Dominion scores impressively on this front. The Zacks Consensus Estimate for fourth-quarter 2021 earnings has moved 3.7% north over the past 60 days to $2.22 per share. The same has increased 2.7% to $8.71 per share for the full year in the same time span.

Positive Earnings Surprise History: Old Dominion has an impressive earnings surprise history. The bottom line outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average being 5.2%.

Driving Factors: Old Dominion's efforts to add shareholder value are appreciative. ODFL shelled out $435.1 million to its shareholders in 2020. In the first nine months of 2021, ODFL paid out dividends of $69.4 million and repurchased shares worth $599 million. Improvement in the operating ratio (operating expenses as a % of revenues) owing to higher revenues is encouraging. With improved freight market conditions, a rise in LTL (Less-Than-Truckload) shipments is driving the top line.

Some other top-ranked stocks in the same industry are as follows:

ArcBest Corporation ARCB sports a Zacks Rank #1 at present. ARCB has a stellar surprise history, earnings of which outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 27.4%.

Shares of ArcBest have rallied more than 100% so far this year. Improving freight conditions in the United States bode well for ARCB. Solid customer demand and higher market rates are supporting growth at ARCB.

Knight-Swift Transportation Holdings KNX currently flaunts a Zacks Rank of 1. KNX’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 14%.

Shares of Knight-Swift have gained 37% so far this year. A strong performance of its logistics segment is aiding growth. Efforts to reward its shareholders also bode well.

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