FedEx (FDX)

The valuation is 15 times earnings or less. It benefits from falling energy prices. It is tied to US growth.

(Top Pick Oct 9/14, Down 9.2%) Rails rolled over and this one went along for the ride.

UPS (UPS-N) versus FedEx (FDX-N)? Of the 2, he would buy this. This is in the middle of a reorganization that is saving them about $1.6 billion a year, which is pretty meaningful. A lower fuel cost is also very important.

A fantastic story. Several years ago they invested very heavily in global expansion to create global hubs abroad, and have been reaping the rewards. However, the stock trades in the mid-20 earnings multiples. Growth outlook, although still good and e-commerce will grow its share against bricks and mortar, which he thinks is going to slow. Prefers above market growers/below market valuation. Wouldn’t recommend buying this given the valuation.

(A Top Pick August 13/14. Up 15.15%.) This is a name that he wants to own for a long time. It is Best in Breed.

Had a great year being up over 20% last year. It was a perfect storm for them. They are benefiting from e-commerce with more and more consumers buying online as opposed to going into stores. They also increased shipping rates in January by about 5% right across the board. All of this happened in an environment where fuel costs were going down. Still thinks there is upside here, and we are in the early days of what is going to play out in the e-commerce space. Dividend yield of 0.5%.

Businesses are doing exceedingly well. They have been cutting costs. 25% is their ground, or consumer, business. It is growing at 3 times retail businesses. Everyone has a ‘buy’ button on their web site and FDX-N benefits from these.

FedEx (FDX-N) or UPS (UPS-N)? Both are decent early cycle industrial stocks. If the global economy suddenly improved, both should do quite well and quite quickly. They are huge beneficiaries of lower oil prices. Historically this one has been thought of as the better operator, better return figures and better margin figures. There is a huge sweet spot in transportation in North America, and that is the rails.

A fine name to own. In the packaging/shipping space and will do well. Gasoline prices are dropping in the US. You are paying 18X earnings for stock that will probably grow EPS at 15%. The only concern he has is that 28% of its revenues still comes from overseas. With the US$ going up, that is a bit of a headwind.

This has a really good long-term chart. It was a little bit flatter through 2012, and then had a nice little run from early 2013. Unless it breaks that trendline significantly, you can probably let this one come back as far as $150.

Have a program of cost-cutting and are aiming at $1.6 billion per year in cost savings. The stock has built this in, but he feels there is of a bit more room to go. One of the things that will help this company is jet fuel prices.

FedEx (FDX-N) or UPS (UPS-N)? Right now would be a good time to buy either of these as you have the holiday season coming up, which is usually a good time for delivery companies. Fuel is a huge component going forward, and the current correction in fuel costs will be good, so this would be an attractive time. He would probably rank UPS over FedEx as he expects it would have a little more upside at this point.

The big tailwind is falling energy costs. They have been taking costs out of the business and he thinks there is another $billion further to take out. Christmas looks good for them.

Great proxy for the global economy. 18.5 times earnings. There is express and freight. Express did reasonably well, but freight did very well. You are going into a very seasonally strong time for them. You aren’t paying a lot for it, although it pays only a half percent dividend.

(A Top Pick Sept 20/13. Up 27.26%.) Hit her valuation target, so she sold her holdings.