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Is It Too Late to Buy FedEx Corporation (FDX) Stock?

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·4 min read
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Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, recently released its Q4 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 22.75% for the quarter, outperforming its benchmark, the S&P 500 Index which returned 12.15% in the same quarter. You should check out Longleaf Partners' top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q4 2020 Investor Letter, the fund highlighted a few stocks and FedEx Corp (NYSE:FDX) is one of them. FedEx Corp (NYSE:FDX) is a multinational delivery services company. In the last three months, FedEx Corp (NYSE:FDX) stock gained 1.3% and on March 24th it had a closing price of $268.29. Here is what the fund said:

"FedEx (76%, 3.69%; 3%, 0.29%), the global logistics company, was the top contributor in 2020 after an outstanding year for the business that wasn’t simply the result of COVID, even if the company has been a strong beneficiary of the rapid societal changes driven by it. The share price returned over 85% in the last six months. Over the last quarter, Ground revenues increased 38%, while operating income grew 61%, despite another round of heavy investments weighing down margins temporarily into the single-digits. The company is indispensable for the United States’ e-commerce deliveries and is reaping the rewards of its investments in previous years to gear up for 7-day delivery. The Express segment is still benefitting from fewer passenger flights diminishing competing underbelly capacity. Despite the sharp appreciation, the stock trades at a reasonable mid-teens P/E multiple on forward earnings, and we expect the value to grow double-digits annually from here. FedEx has done its part to give back this year in the face of COVID. Since the onset of the pandemic, FedEx has delivered more than 55 kilotons of personal protective equipment, including more than two billion face masks, and more than 9,600 humanitarian aid shipments around the globe. More recently, FedEx was tapped to deliver the first wave of Pfizer-BioNTech vaccines across the US, and its infrastructure will be critical to successfully disseminating the vaccines."

Fedex FDX
Fedex FDX

Earlier this month, we published an article revealing that FedEx Corp (NYSE:FDX) expects demand for its delivery services to remain strong.

In Q4 2020, the number of bullish hedge fund positions on FedEx Corp (NYSE:FDX) stock decreased by about 11% from the previous quarter (see the chart here), so a number of other hedge fund managers don't believe in FedEx's growth potential. Our calculations showed that FedEx Corp (NYSE:FDX) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.