FedEx (FDX)

There is a chance that AMZN-Q shifts some of it business away from USPS. Solid return on equity. Reasonable valuations. But there are other stocks that score better for him.

A great performer in competition with Amazon. It won't rollover against Amazon, but compete. FedEx's e-commerce business is propelling its growth. Also, we're on the verge of the driverless car, which will greatly save costs for FedEx. Good earnings. Well-managed. Expanding internationally, though a cyber attack last year cost them, Overall, great opportunity here.

Fears of Amazon entering their space pressured their stock price, but it's hard to duplicate FedEx which has a massive army of vans, planes and couriers. They're still a duopoly with UPS. Guidance was just raised against a backdrop of global economic recovery. Trading at 16x forward earnings. 14% longterm growth rate. (Analysts price target: $286.56)

He thinks this is a very good company, but is not something he owns. Amazon has made a huge investment in this space and the competition is too great. He prefers Amazon (AMZN-N).

(A Top Pick December 1/17. Up 7.8%.) This is a higher-beta stock, has participated in this rapidly rising market, which is in the midst of a correction. Fundamental basis for the purchase is the amount of online purchasing. Technical trigger for the purchase: a successful test of a trend line. When the stock pulls back and then the trend line starts to move back up, he buys it.

Looking at a long-term chart, this company has done extremely well, and has certainly participated in this broader rally. It’s doing very well and is a beneficiary of a very good market. Also, they are very well-managed and there is a lot to look forward to. Look at the costs embedded in in their P&L, delivery costs, labour, fuel costs, equipment costs, 150,000 vehicles and 800 airplanes. All this is changing. We are going to autonomous driving and drone delivery at some point. That is going to change the whole model in their favour. Trades at a very reasonable multiple, about 15 or 16 times earnings.

(A Top Pick Jul 7/17, Up 24%) Consumer spending growth has been an absolute hero. The company is being operated well. Management is following through so you should stick with this. He likes logistics.

Trades at a relatively good valuation, about 15X operating. Also, this is more of an e-commerce play. Volumes are rising and the cost structure is changing dramatically in their favour. A great hold just from an operating standpoint, but there is also a catalyst for higher growth rates into the future, because of cost containment.

Moved up, consolidated, and just moved up again. It crossed the trend line about 2 weeks ago so they bought it and plans to keep it as long as the trend line keeps up. (Analysts’ target: $240.00)

This is very sensitive to the global economy. They bought TNT and have been integrating that and reducing costs. As economic activity picks up, these quick deliveries accelerate and the pricing power improves. This is not just the US. Every major developed economy is accelerating at the same time. Dividend yield of 0.9%. (Analysts’ price target is $239.)

(A Top Pick Aug 18/17. Up 10%.) This tends to have a seasonal run between Aug 27 to Nov 29, which is pretty much your US Thanksgiving. This is really a movement on the play of people and things ahead of the holiday season. Shipping activity has been very strong this year. Online retailers are doing great, and this is a beneficiary of that. This broke out of a level of resistance, came back and tested it as a level of support.

You are going to see a very strong season coming because of Christmas. Not an expensive stock, trading at around 18X earnings. One of the premier companies in this space. As more and more people move to online e-commerce, this will really benefit.

The high shipping season is end of year. Buy August 27^th and sell November 29^th. (Analysts’ target: $235.00).

The business mix has changed a little. There has been a real decline in the sort of “envelopes overnight” as well as international delivery. A lot of business is now done through email. They acquired TNT, so we have to see how that goes. It is a survivor and a good company.

Online has really started to drive the stock, and it is a bigger and bigger share. This company has about 10% of their revenue, but are #1 in truckload delivery. Extremely well placed. Dividend yield of 0.9%. (Analysts’ price target is $235.)