FedEx (FDX)

Historically this has done very well right through until the end of April, then it goes through a period of seasonal “not doing much of anything”. Their period of seasonal strength is from October to around now. You may want to be a little cautious now. Currently this is in a trading range. At a time when markets are showing signs of being overbought, this is showing early signs of underperformance relative to the market. Technically, it looks like now is a good time to start taking profits.

(His theme today is economically sensitive stocks, and ones that have disappointed lately.) About a year ago, it acquired TNT, a European delivery company. They have a huge fleet of 150,000 vehicles, 650 airplanes, and are really getting involved in the e-commerce business. More and more deliveries are coming to our homes. This is going to benefit from changes in technology such as driverless FedEx trucks and drone technology. Dividend yield of 0.9%. (Analysts’ price target is $220.)

(A Top Pick Dec 7/15. Up 26.44%.) Just sold this. It had a decent run and is not especially expensive, but his only worry going forward is when Amazon (AMZ-N) started talking about getting their own fleet.

Some have said e-commerce is only 10%-12% of retail sales in North America. It won’t get to 100%, but there is still a massive runway. The biggest is Amazon (AMZN-Q), and the question is, are they going to continue to use them and UPS (UPS-N) or will it build out its own infrastructure? Don’t buy this because of the e-commerce play alone, buy it because they are smart operators. Both Amazon and UPS are still quite attractive Holds.

She doesn’t know how it responds to the political climate. She thinks we are getting to the end of an earnings recession. She thinks this bodes well for this stock. It is not a particular buying opportunity.

An iconic global brand that is very levered to the new economy which is very important. This is one you can own that is really levered to online buying, which is where the volume is very much going. On any pullback or dip, you could add to this name.

(Market Call Minute.) Shipping volumes are slowing. They did have very good earnings which is a positive, but in general the trend has been down

Not an expensive stock. Trading at 14X earnings. Made an acquisition of TNT Express and are integrating it. Initially people thought it would be earnings neutral, but it has had some issues and there is some restructuring going on. Another thing people are worried about is that their biggest growth area has been business to consumer. There is a lot of competition from small start-up companies in the last mile of dropping off packages. Because of that, there may be some price compression. However, we are going into a season where they should have very strong quarters, and there should be a huge uptick. Make sure that the TNT acquisition is not causing more problems than they expected.

(Market Call Minute.)

This is in the global courier business. Depending on the health of the global economy, that is what is going to drive the performance of the stock.

(Top Pick Jun 4/15, Down 7.39%) They started the correction last spring. They bottomed at $120 last February and are now at $160. He would have no problem owning it right now.

Would suggest UPS (UPS-N) instead, as it has a better capital return profile, and is more of a freight company than an express or business company. FedEx Express is slowing down, still good growth, but not the same growth. Amazon (AMZ-N) is looking into delivering their own freight too, a potential competitor. Stuff is happening that are generally headwinds for them.

It is reasonably priced, coming a fair way off the peak. They are benefiting from the growth in Internet sales. They benefit from falling oil prices. They are expanding globally. They are the dominant player. There is not a lot of downside.

FedEx (FDX-N) or UPS (UPS-N)? Both very good companies. Everybody is now buying online, and both companies are bulking up for the peak season. They have both equally increased prices. As an income investor, he has always preferred UPS. Feels it is a better run business with higher margins. Dividend yield of less than 1%.

FedEx (FDX-N) or UPS (UPS-N)? His model price is $153.15. Of the 2, he would look at this one before he would look at UPS.