The miss mostly reflecting the rise in the strength of the dollar. The good news is that the volume of packages increased by 2% in the express segment, and 5% in the ground segment, reflecting the growth in the economy. The increase in the ground segment benefited from the acquisition of the logistics company GENCO Distribution System Inc. FedEx is the largest consumer of jet fuel after the U.S. military, almost 1.5 billion gallons a year, so naturally it is sensitive to jet fuel price increases.
So, what are the best air freight and logistics companies investors should be buying? Here are the top three, according to TheStreet Ratings, TheStreet's proprietary ratings tool.
TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.
Buying an S&P 500 stock that TheStreet Ratings rated a buy yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a buy yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.