Longleaf Partners, managed by Southeastern Asset Management, released its “Partners Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned -6.31% in the second quarter, compared to S&P’s 4.28% return and Russell 1000 Value’s -2.17% return. There weren’t enough big winners in the portfolio, and the relative performance was disappointing because there were more 10%+ decliners. Conversely, the stock price declines were overreactions, and as a result, the quarter’s aggregate value per share performance exceeded the stock price performance. For more information on the fund’s best picks in 2024, please check its top five holdings.
Longleaf Partners Fund highlighted stocks like FedEx Corporation (NYSE:FDX) in the second quarter 2024 investor letter. Founded in 1971, FedEx Corporation (NYSE:FDX) offers transportation, e-commerce, and business services. On July 25, 2024, FedEx Corporation (NYSE:FDX) stock closed at $298.59 per share. One-month return of FedEx Corporation (NYSE:FDX) was -0.42%, and its shares gained 11.06% of their value over the last 52 weeks. FedEx Corporation (NYSE:FDX) has a market capitalization of $72.946 billion.
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.”
A driver unloading packages from a van for a time-critical delivery.
FedEx Corporation (NYSE:FDX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. FedEx Corporation (NYSE:FDX) was held by 56 hedge fund portfolios at the end of the first quarter, compared to 70 in the previous quarter, according to our database. In the fiscal year 2024, FedEx Corporation (NYSE:FDX) achieved a $6.2 billion adjusted operating profit, marking a 16% year-over-year improvement. The adjusted operating margin expanded by 110 basis points, and the adjusted earnings per share (EPS) increased by 19%. These results are impressive given that the revenue decreased by 3%. While we acknowledge the potential of FedEx Corporation (NYSE:FDX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed FedEx Corporation (NYSE:FDX) and shared the list of largest publicly traded industrial companies in the US. In the last quarter, Longleaf Partners Fund mentioned FedEx Corporation (NYSE:FDX) and highlighted that the company exceeded consensus estimates, implemented substantial cost reductions, and conducted significant stock buybacks. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
