11 Best Freight Stocks To Buy Now

3. FedEx Corporation (NYSE:FDX)

Number of Hedge Fund Holders: 56

FedEx Corporation (NYSE:FDX) ranks third on our list of the best freight stocks to buy now. The transport company is focused on transportation, e-commerce, and business services. FedEx Corporation (NYSE:FDX) is on its way to transforming into a carbon-neutral company by 2040. Under its freight segment, the company offers less-than-truckload freight services with various packages including FedEx Freight Priority, FedEx Freight Economy, and FedEx Freight Direct.

FedEx Corporation (NYSE:FDX) is highly popular among investors. At the end of the first quarter of 2024, 56 hedge funds were bullish on FedEx Corporation (NYSE:FDX) and disclosed positions worth $2.1 billion. Of those, Michael Larson’s Bill & Melinda Gates Foundation Trust was the top investor in the company and disclosed a stake worth $444.57 million.

During the first quarter of 2024, the company completed an accelerated share repurchase program of $1 billion. FedEx Corporation (NYSE:FDX) also plans to repurchase an additional $500 million of common stock in the fiscal fourth quarter of 2024, bringing the buyback total for fiscal 2024 to $2.5 billion. It also maintains a strong financial position with cash and cash equivalents worth $5.64 billion, surpassing its current long-term debt portion worth $67 million. The company’s financial position explains its ability to grow its cash dividend by 14.15% over the past 5 years. Here are some comments from Longleaf Partners Fund’s, managed by Southeastern Asset Management, Q1 2024 investor letter:

“FedEx Corporation (NYSE:FDX) – Global logistics company FedEx performed well for the period. The company beat consensus estimates in the quarter and showed material progress in its DRIVE cost reduction program that we have written about previously. FedEx also repurchased substantial stock in the quarter. Its 6% annualized repurchase pace is very strong compared to its history, and the company authorized another $5 billion share repurchase program. FedEx also lowered capital expenditures guidance for the fiscal year, further helping FCF generation. We believe the company is approximately halfway through its cost cutting program with more room to go that is still not appreciated by the market.”

The company’s broad portfolio of transportation, e-commerce, and business services sets it apart from its competitors. The company grew its earnings by 50.43% over the past 12 months. Analysts polled by Yahoo Finance expect the company to grow its earnings by 18.85% in 2024, and by 21.18% in 2025.