This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

FedEx Delivers Value, With or Without Ackman

Stocks in this article: FDX MCD PG UPS YRCW

NEW YORK ( TheStreet) -- Shares of FedEx (FDX) closed Tuesday at $103.15, up 4.4% after rising more than 7% at one point on speculation Bill Ackman, hedge fund manager of Pershing Square, was looking to make a sizable investment in the shipping giant.

It has not been confirmed that Ackman is interested in FedEx, but a Reuters report detailed an investment worth as much as $1 billion that may be going somewhere.

With past successes including McDonald's (MCD) and Proctor & Gamble (PG), Ackman has an excellent record of picking winners. In the case of FedEx, investors are looking to skate to where they think the puck may be going next.

From my vantage point, though, FedEx was a buy with or without Ackman, even though investors were sour on FedEx's fourth-quarter results. The Street didn't believe it was good enough, sending the stock down 8%, which also yielded several downgrades.

As I've discussed recently, it was an overreaction. The company is going through a period of transition. I'm not going to make excuses for weak profits or try to pretend that shipping volumes have not been an issue. But the company needed time to allow management to execute its plan.

Contrary to what many analysts believe, there were very few surprises in the report. The company's freight business has struggled for some time, with the express and ground businesses picking up the slack. This quarter was no different. Nor did management pretend that it was an excellent quarter.

The company posted revenue of $11.4 billion, representing 4% year-over-year growth and broadly in line with Street estimates. As has been a recurring theme, shipping volume was once again on the light side -- as average daily shipments fell 1% year-over-year in the U.S. But the company was able to offset this with a 3% increase in international export volumes.

Segment-wise, I believe that FedEx did what it had to do -- even though many disagree. Both the ground business and express business were up, 12% and 3% respectively. This made up for the 1% decline in freight. Was this a concern? I believe it was. But I don't believe that this is a situation where FedEx is losing ground to competitors.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,055.99 +2.28 0.01%
S&P 500 2,092.59 +3.82 0.18%
NASDAQ 4,810.4870 +3.6280 0.08%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs