4. FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Holders: 59
FedEx Corporation (NYSE:FDX) is an American multinational transportation, e-commerce, and business services company headquartered in Tennessee. The company pioneered the overnight delivery service and expanded its offerings to include various shipping and logistics solutions through its subsidiaries, such as FedEx Express and FedEx Freight.
The company has a strong infrastructure including one of the largest air cargo fleets globally and it plays a significant role in facilitating efficient parcel delivery and logistics management.
FedEx (NYSE:FDX) announced its earnings on September 19, missing the revenue and EPS expectations. The EPS of $3.60 was $1.17 below estimates and revenue of $21.6 billion missed the forecast by $310 million. Despite that, the company remains on track to achieve $4 billion in savings through its DRIVE program by FY 2025.
The company’s drive program is “a comprehensive program to improve the company’s long-term profitability.” In the first quarter alone, the company achieved $390 million in DRIVE-related savings, which shows the effectiveness of its cost-reduction strategies. The company expects these savings to build sequentially throughout the fiscal year and improve its profit margins.
FedEx (NYSE:FDX) also mentioned its $5.2 billion CapEx plan for FY 2025 during its Q1 2025 earnings call, which is aimed at investing in high-return segments of its portfolio. As of August 31, the company’s cash on hand was $5.9 billion. Moreover, with a strong balance sheet and $1 billion in stock repurchases in Q1, the company shows confidence in its long-term value creation potential.
With 59 hedge funds holding FedEx’s (NYSE:FDX) shares in Q2, it takes the 4th spot on our list of best transportation stocks to invest in. Bill & Melinda Gates Foundation Trust has a position worth $460.063 million in the company and is its most significant shareholder, as of June 30.
You can also take a look at FedEx Corporation (FDX): A Bull Case Theory.
Longleaf Partners Fund stated the following regarding FedEx Corporation (NYSE:FDX) in its Q2 2024 investor letter:
“FedEx Corporation (NYSE:FDX) – Global logistics company FedEx was the top contributor for the quarter. Late in the quarter, FedEx reported strong fiscal year results, highlighting a year of strong cost management in a challenging revenue environment. Earnings per share (EPS) increased by 19%, and reduced capital expenditures narrowed the gap between EPS and FCF per share. With the increase in FCF, the company has become a significant share repurchaser, which is a welcome change. The company also announced a strategic review of their Freight segment. Our appraisal has long accounted for the underappreciated value in FedEx’s less-than-truckload operations. A potential spin-off or sale could unlock substantial value, as comparable companies like Old Dominion trade at significantly higher multiples on revenue, cash flow, and earnings than those applied to FedEx Freight by the market and our appraisal today.”
