Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is one of the Best Beaten Down Stocks to Buy According to Hedge Funds. On October 14, Raymond James reduced the price target on the company’s stock to $160 from $165, while keeping an “Outperform” rating. As per the firm, upcoming rate cuts might eventually fuel activity, mainly in the auto and housing sectors. Old Dominion Freight Line, Inc. (NASDAQ:ODFL) released certain less-than-truckload (LTL) operating metrics for August 2025. Notably, revenue per day fel ...

Core Insights - ClearBridge Investments released its third-quarter 2025 investor letter for the ClearBridge Dividend Strategy, highlighting strong stock market performance and gains from AI exposure, despite lagging behind the S&P 500 Index benchmark [1] Group 1: Company Performance - The third-quarter performance of ClearBridge Dividend Strategy was strong, although it underperformed the S&P 500 Index [1] - Marsh & McLennan Companies, Inc. (NYSE:MMC) had a one-month return of 2.55% but lost 10.11% over the last 52 weeks, closing at $203.84 per share with a market capitalization of $100.213 billion on October 7, 2025 [2] - ClearBridge initiated new positions in Marsh & McLennan and Old Dominion Freight Line, citing Marsh & McLennan as a high-quality compounder that is currently undervalued due to temporary pricing softness in the industry [3] Group 2: Investment Sentiment - Marsh & McLennan is not among the 30 most popular stocks among hedge funds, with 60 hedge fund portfolios holding the stock at the end of Q2 2025, an increase from 56 in the previous quarter [3] - While acknowledging Marsh & McLennan's potential, ClearBridge believes certain AI stocks present greater upside potential and lower downside risk [3]

Group 1 - The article indicates that the LTL (Less Than Truckload) market is showing signs of recovery this year, following a previous article from April [1] - Old Dominion (NASDAQ: ODFL) is identified as the preferred carrier in the sector, noted for its leadership position [1] Group 2 - The author expresses a beneficial long position in Old Dominion shares, indicating confidence in the company's performance [2]

Financial Data and Key Metrics Changes - The second quarter revenue decreased year over year by 0.7% to $817.1 million, with operating ratio at 87.8% compared to 83.3% in the same quarter last year [5][14][18] - Revenue per shipment excluding fuel surcharge increased by 2.7% to $298.71, while including fuel surcharge it increased by 1.8% to $351.36 [14][18] - Total operating expenses increased by 4.7% year over year, with salaries, wages, and benefits rising by 5% due to inflationary pressures [15][18] Business Line Data and Key Metrics Changes - Overall shipments for workdays were down 2.8% year over year, with tonnage only up 0.4% from the first quarter [6][8] - Newer terminals (opened less than three years) saw a 4% sequential improvement in shipments per workday compared to the first quarter [7] - Legacy facilities (open longer than three years) experienced a 2% sequential increase in shipments compared to the first quarter, but down 3.5% year over year [7] Market Data and Key Metrics Changes - The company noted muted volume trends due to the macroeconomic landscape, with overall shipment trends reflecting cautious customer approaches [6][8] - The Los Angeles region showed softer trends, impacting overall performance [9][52] Company Strategy and Development Direction - The company is focused on optimizing variable costs and improving network efficiency while maintaining a customer-centric approach [5][10] - There is an emphasis on getting closer to customers and providing unique solutions, which is part of the long-term strategy [21][22] - The company plans to continue investing in network expansion and technology to enhance operational efficiency [17][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to the dynamic environment, despite the lack of typical volume increases in the second quarter [20] - The focus remains on controllable factors, with a commitment to maintaining high service levels and managing costs effectively [10][20] - Future growth is anticipated as the company continues to mature its facilities and optimize its network [11][106] Other Important Information - The company plans to spend approximately $600 million to $650 million in capital expenditures this year, focusing on network expansion and technology investments [17][99] - The cargo claims ratio was reported at 0.5, indicating effective management of claims [10] Q&A Session Summary Question: Outlook on volumes and pricing for Q3 - Management indicated that tonnage comparisons will become tougher due to new terminal openings last year, but they expect to maintain pricing discipline [26][27] Question: Labor reductions and wage increases - Management clarified that wage increases typically occur in the second half of the year, and headcount adjustments are made to align with volume levels [35][36] Question: Industry capacity and pricing recovery - Management believes that LTL capacity is shrinking over time, and they are well-positioned to leverage their investments in the upcoming market recovery [44][46] Question: Volume trends in July - July tonnage is trending flat, with shipments per day down about 2.25%, reflecting ongoing cautiousness in the market [51][52] Question: Contractual renewals and competitive pricing - The 5.1% renewal rate is lower than previous periods, but management emphasized that the pricing environment remains rational and focused on service quality [58][60] Question: Cost management and operating leverage - Management noted that while some cost actions are tactical, they are also building long-term structural gains through network optimization [67][70] Question: Pricing environment and legacy freight - Management is optimistic about pricing opportunities as they continue to optimize their network and improve service levels [73][75]