Just to be clear, I'm not suggesting that FedEx is a bad company. Poor shipping volumes or not, I'm willing to credit management for growing free-cash-flow by close to 60%, due (in part) to aggressive cost-controls. This is while the company was able to deliver a 7% year-over-year improvement in adjusted earnings-per-share, which was enough to beat expectations.
The company has an excellent management team. But I continue to believe the Street's near-term expectations for this business remain too high. If Smith's words serve as any indication, management is doing what it can to keep those expectations in check. Even so, given the stock's recent gains, I just don't believe Smith's cautious tone has had its intended effect.
With that in mind, it's risky to place a bet on FedEx at this level absent clearer signs that the global economic slowdown is truly a thing of the past. I believe investors should remain patient and allow management to execute its long-term strategy of producing value. But it's not going to happen overnight. With the stock trading at around $109 per share, I just don't believe there is much (if any) value left.
At the time of publication, the author held no position in any of the stocks mentioned.Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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