This logistics name hated by Wall Street made Josh Brown’s Best Stocks list
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — This is a good one. Today we’re going to tell you about a stock that we currently own for clients in our Porterhouse Concentrated Momentum Strategy . The stock is working, but Wall Street hates it. Either the buyers who have taken it up to new highs will be right or Wall Street’s sell-side will be vindicated. Either way, it’s going to be a battle worth watching. Expeditors International of Washington (EXPD) is a global logistics company based in Bellevue, Washington. The “of Washington” part comes from its paperwork. The company was incorporated in the State of Washington in May of 1979 and back then a new company with a generic name would often add its home state to get the name registered and set it apart from similarly named businesses elsewhere. Utilities did it often, which is how you got the Public Service Company of Colorado (now part of Xcel Energy). The Coca-Cola Bottling Company of New York did it too. Sometimes companies claimed the whole country, like the Aluminum Company of America which eventually became Alcoa (AA) or the Radio Corporation of America which became RCA. Forty-seven years later, EXPD is still claiming Of Washington in its handle. I respect that. EXPD is up 30% YTD on a total return basis, which ranks 8th of the 44 stocks in the iShares US Transportation ETF (IYT) . It’s the 10th largest position in the ETF at about a 3.5% weighting and of the larger names, it’s beating almost everything. The stock is on the verge of another breakout but the analysts do not like it. They believe that the drivers that got the stock here are one-time or short-term phenomena unlikely to repeat. Heading into the summer, five of the 17 analysts covering the stock rated it a strong sell. Even after a blowout second quarter, the average price target in August was $159, below where the stock trades today. Their case is that these are peak cycle earnings wearing a growth multiple. Management credited a temporary surge in tariff-related customs filings for part of the pricing lift, and a customs broker doesn’t get a tariff fire drill every quarter. Ocean container volume was flat from a year ago (although up since Q1 as Sean will explain), so the improvement there came from carriers holding back capacity, not from more boxes moving. The margin help from the tech restructuring is also a one-time benefit that won’t compound. And at about 28 times trailing earnings, investors are paying up for a cyclical business that the Street, before the second quarter, was modeling for roughly 2% EPS growth in 2027. Spicy set-up! Someone’s going to be right. Someone’s going to be wrong. We’re going to risk-manage this thing either way at the bottom of today’s column. We have one more name for you today in addition to the normal run of stats we do each Monday. We’re taking a peek at another strong, trending name on our list, Johnson Controls (JCI) . Buckle up, we’re moving… As of Oct 12, there are 138 names on The Best Stocks in the Market list. Top sector ranking: Top industries: Top 5 best stocks by relative strength: Spotlight: Expeditors International of Washington, Inc. (EXPD) Sean — Expeditors is an asset-light global logistics company. It buys cargo space from airlines and ocean carriers, resells it to shippers, and layers customs brokerage, warehousing and distribution on top. In 2025, airfreight was 36% of gross revenue, ocean freight 25%, and customs brokerage and other services 39%. EXPD is trading at $193, up 30.7% YTD and 62.1% over the past year on a total return basis, about 1% below its 52-week high of $195.32. The cost of transporting things around the world has gone up significantly, and Expeditors is reaping the rewards. You can think of this company as a broker of space, matching carriers with shippers in need of transportation. Second quarter EPS rose 51.5% to $2.03, about 21% above consensus of $1.68, on revenue up 32.1% to $3.50 billion. Operating income grew 41% to $350 million, a 10% operating margin versus 9.3% a year ago, even after a $25 million restructuring charge. Airfreight revenue jumped 57% to $1.49 billion on 14% higher tonnage, driven by (you guessed it) AI hyperscalers shipping servers. Ocean revenue rose 5% to $711 million, with container volume up 7% from Q1, the first sequential increase since the third quarter of 2025. As Josh noted, a lot of this recent fundamental momentum is thought of as cyclical and not durable by the analysts. This is why it trades at about 23x the next year’s earnings expectations in the midst of a difficult supply chain environment for shippers. Expeditors is ramping up its capital returns while it has the leverage to do so. It sent $461 million back to shareholders in Q2, about 61% more than the $287 million in Q1, for $748 million so far this year. A new $3 billion repurchase authorization took effect July 1, which is roughly 12% of its market cap. Q2 buybacks were 2.3 million shares at an average of $151.50, and the stock now trades about 28% above that price. Q3 earnings are expected Nov. 3 with consensus EPS near $2.13, followed by an Investor Day in New York on Nov. 18. Josh — As you can see, Expeditors has been in a steady climb since the spring except for a quick shakeout in early May that tagged the 200-day. The stock has worked higher ever since. The late July pullback stopped at $164, right on the 50-day. Then came the August 4th earnings report Sean walked through above. The stock traded from $170 to $183 in a single session on more than double its normal volume. No gap, just buyers paying up all day long. A week of digestion held above $177 and the next push carried it through $184. Since mid-August the stock has been building a tight range between $183 and $195, with the rising 50-day climbing up underneath to meet it. Friday’s close was $193, with the 50-day at $187 and the 200-day at $164. The $196 high from Friday is the level to clear. With RSI at 57, the stock has spent two months working off its momentum without giving back any of the move. RSI pushed into the mid 70s in July and ran near 70 again in late August. It has cooled back toward the middle of its range while price has stayed within a few percent of the highs. That’s digestion measured in time rather than price. It leaves plenty of room for another run at $196. We’re giving you tight stops on purpose, given the skepticism around this company’s fundamental story. The stock has spent two months coiling in a narrow range, so the levels that matter are close by. Traders can use $183 as their stop. That’s the September 24th low, where the late September dip found buyers right on the 50-day. A close below it breaks the range the stock has spent two months building. The stock will tell you quickly whether you’re right. Watch the closing prints, not the intraday wiggles. Investors can anchor to $177, the post-earnings pullback low from early August. That’s where buyers defended the earnings move the first time. A weekly close below there and the August reaction has been unwound. Johnson Controls International Plc (JCI) Sean — Johnson Controls makes HVAC equipment and chillers, building automation and controls, and fire and security systems, plus the service contracts that go with them. The growth driver is data center cooling, which management expects to be in the high-teens percent of FY26 revenue and roughly a third of revenue in three to five years. JCI trades at $157.44, up 29.7% YTD and 43.7% over the past year on a total return basis, about 2% below its 52-week high of $160.41. Management raised FY26 adjusted EPS guidance to about $5.05 from $4.85, and organic sales growth to about 8% from 6%. Q4 guidance is adjusted EPS of about $1.55 versus the $1.52 consensus, on 9% to 10% organic growth. The long-term organic growth target was also lifted to high single digits. On the AI front, JCI closed its Alloy Enterprises acquisition in May, adding liquid cooling components for data centers. And to further lean into AI, management cited NVIDIA certification of its coolant distribution units with a pipeline above $1 billion. Josh — Legit breakout. Johnson Controls spent most of this year stuck below $151. Every rally from the spring through the summer stalled there, including the August earnings pop that briefly carried the stock to $157 before it faded right back into the range. That failed breakout dragged the stock all the way down to $136 by mid-September, where the rising 200-day caught it. Then the data center story Sean laid out above took over. The stock closed above $151 on October 1st, gapped higher the next morning, and printed a new high at $160 on October 6th. On Thursday it dipped to $151 intraday, right back to the old ceiling, and closed at $154. Friday added another 2% to $157, with the 50-day at $147 and the 200-day at $139. With RSI at 64, the breakout has cooled off from a brush with 70 on the run to $160 without the stock giving any of it back. The more telling read came in September. Price made a lower low on September 14th than it did at the end of August, but RSI made a higher low. Sellers pushed the stock down further and couldn’t take momentum down with it. That divergence marked the bottom. Healthy! Traders can use $151 as their stop. That’s the ceiling the stock spent most of the year under, and Thursday’s test of it held. A close back below it puts the stock back in the old range. You won’t have to wait long for an answer. Use the close, not the intraday low. Investors can anchor to $136, the mid-September low. The rising 200-day at $139 sits just above it, and that’s where buyers ended the selloff after the August breakout failed. A weekly close below $136 and the story has to start over. Stops are 4% and 13% below the current price. Another tight leash in a market full of sudden breakdowns. Makes sense. DISCLOSURES: Ritholtz currently holds shares of Expeditors International of Washington, Inc. (EXPD) for clients in its Porterhouse concentrated momentum strategy. For full disclaimer and additional details, go here . All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. 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