Hub Group Class A (NASDAQ: HUBG)
Quality Value Investing Research Report | $HUBG Updated Coverage | October 2025
In this updated coverage research report, we’ll reexamine the QVI Real-Time Stock Picks industrials sector holding, Hub Group HUBG 0.00%↑, to determine whether it still meets the Quality Value Investing criteria based on our checklist analysis of the company’s current wealth and the share price’s present value.
Hub Group: Current Wealth
Value Proposition
Hub Group, Inc. (NASDAQ: HUBG) is a dividend-paying small-cap stock in the industrials sector’s intermodal freight and logistics industry. It was added to the QVI Real-Time Stock Picks on May 2, 2023, with a cost basis of $37.13 per share, adjusted for dividends paid to cash.
Hub Group Inc., a supply chain solutions provider, offers transportation and logistics management services across North America. The company’s transportation options include intermodal, truckload, less-than-truckload, flatbed, temperature-controlled, dedicated, and regional trucking, as well as final-mile, railcar, small-parcel, and international transportation. Its logistics services encompass complete outsourced solutions, transportation management, freight consolidation, warehousing, and fulfillment. The company also provides dry van, expedited, and brokerage services. Serving industries such as retail, consumer products, automotive, and durable goods, Hub Group was founded in 1971 and is headquartered in Oak Brook, Illinois, USA.
Economic Moat
Morningstar assigns Hub Group a narrow moat rating, highlighting the company’s intermodal shipping and marketing operations, which rank second behind JB Hunt ($JBHT).
QVI’s Value Proposition Elevator Pitch for HUBG:
Hub Group ranks as the second-largest intermodal marketing company in the freight transportation and logistics industry. It offers many long-term growth opportunities despite short-term recession concerns and possible impacts on the trucking industry.
QVI’s value proposition rating for Hub Group: Bullish.
Returns on Management
Revenue Growth and Profit Margins
Per the chart below, Hub Group’s trailing five-year annualized revenue growth was in the low single digits, underperforming the S&P 500’s median growth rate of +16.0%. Additionally, the company’s topline growth was negative at -5.4%, compared with the broader market’s +18.8% over the most recently reported twelve months.
Further down the income statement, Hub Group’s low-single-digit positive net profit margin, driven by a low gross margin, lagged the benchmark’s median net margin of +23.2% from a 54.9% gross margin.
Returns on Equity and Invested Capital
Hub Group’s senior management produced a single-digit return on equity, or ROE, below QVI’s targeted threshold and the benchmark’s median ROE of +49.6%.
Stock buyback programs often elevate ROE. For example, Hub Group had actively engaged in stock buybacks, with a $250 million program announced in October 2023, but had repurchased only approximately $14 million year-to-date as of July 2025.
Hub Group’s return on invested capital, or ROIC, was below QVI’s threshold and the S&P 500’s median ROIC of +27.6%. Moreover, HUBG’s ROIC didn’t exceed its weighted average cost of capital (WACC), indicating that its senior executives are struggling with capital allocation.
Owners’ Earnings
In a further test of management effectiveness, the five-year trailing current wealth of owners’ earnings for HUBG—annualized EPS growth plus dividend rate growth—was in the low single digits, an unacceptable return for shareholders.
When replacing its EPS growth with Hub Group’s free cash flow growth, the five-year owners’ earnings remain in the low single digits.
QVI’s business fundamentals rating for Hub Group.: Bearish.
Next, we’ll examine the company’s enterprise downsize risks, the present value of the stock price, share price downside risks, and the investment thesis, each exclusive to Quality Value Investing’s premium (paying) subscribers.
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Unless noted, all data presented is sourced from Charles Schwab & Co., Hub Group Inc., Google Finance, GuruFocus, and Yahoo Finance as of the market close on October 29, 2025, and is intended for illustration purposes only.
Disclosure: As of the date of this research report, I/we hold no beneficial positions in HUBG common shares in our family portfolio. I wrote this report myself, and it expresses my own opinions. I am not receiving compensation for it other than from Substack paid subscriptions. I have no business relationship with any company whose stock is mentioned in this post.
Additional Disclosure: Quality Value Investing by David J. Waldron’s primary ticker research reports are for informational purposes only. The accuracy of the data cannot be guaranteed. Narrative and analytics are impersonal, meaning they are not tailored to individual needs or intended for portfolio construction beyond The QVI Real-Time Stock Picks, which is presented solely for educational purposes. David is a private investor and author, not an investment adviser. Readers should always engage in independent research or due diligence and, as appropriate, consider consulting a fee-only certified financial planner, a licensed discount broker-dealer, a flat-fee registered investment adviser, a certified public accountant, or a specialized attorney before making any investment, income tax, or estate planning decisions.
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