FedEx (FDX)

This is one of those great brands. Investors are warming up to logistics. They were the 4^th largest airline and very levered into international freight shipments. That fell off precipitously in 2008. Coming out the other side, we are starting to see their ability to step dance their way through that difficulty. They have retooled and have less planes than they have ever had. The company is really lean and mean. Feels the real surprise is going to be a re-engagement on the high end of Chinese and Asian consumers.

United Parcel Service (UPS-N) or FedEx (FDX-N)? Both are doing well from a stock side, better than on a fundamental side. UPS is more of the ground transport play. This is an air play. This has been more proactive in terms of the management of their business and is trying to wring out about $1.6 billion annually by the beginning of 2016. For the time being he would pass on both of these as they are a little too expensive on the multiple and valuation side.

His view on this company is pretty constructive. With Internet shopping, these types of companies will grow and will continue to grow. This company is quite focused on share buybacks.

He has no direct exposure to US transportation. Prefers CSX-N which he is researching.

Restructured a little while ago, and did some cost-cutting along with some efficiency improvements. Isolated some different generating ideas. Earnings came in above consensus. As the US and worldwide recovery is moving along more, you’re going to find logistics companies doing extremely well. Yield of 0.53%.

(Top Pick May 30/14, Up 36.02%) They came out with a big cost cutting initiative that she bought into. It had a good run and hit her valuation target and then the stock continued moving last week after releasing earnings. It is a little high on the valuation side.

If you have a position with this, he would continue to Hold. Feels it is better value than United Parcel Service (UPS-N). This is a play on the continued growth of the US economy, and particularly the online spending that seems to be increasing dramatically every year.

(Top Pick April 18’13, Up 43.60%) It hit a target so she sold. A great franchise. Some cost cutting still coming into the numbers, but reflected in the numbers. People are still cautiously optimistic on this one.

Likes the sector. It is a question on when he pulls the trigger. Amazon is delivering more and more. It is a question of valuation. If there are any jitters about global growth it will come down and this would be a trigger to buy it.

A problem he has with this is that its competitor UPS (UPS-N) trades at a much lower PE, has a higher dividend, trades at a higher price to free cash flow and has higher net margins. You are paying for a higher multiple for a company that is not as good. Regardless, the company will do well because the economy is improving globally. Consider rotating into UPS.

Have the ability to grow without much help from the economy. Have big cost cutting initiative that will take hold in 2015. A fleet update, voluntary retirement. Have been profitable even in tough economies.

Generally likes shippers. Long-term view is positive in that e-commerce is a developing theme that will continue on and on. Shipping times keep getting less and this company and UPS (UPS-N) will benefit. He would watch fuel prices as this is a headwind that is a big component of shippers. Would look to take advantage of any kind of price weakness on either of these names.

(A Top Pick April 18/13. Up 19.83%.) One of the more economically tied stocks. Really likes their cost cutting program which allows them to grow their earnings without having to have the GDP growth and top line growth behind it. With fuel costs and global demand people have been changing their shipping patterns. Launched a $1.7 billion cost-cutting initiative that starts in 2015. A 3^rd of that is new, more efficient airplanes and another 3^rd is voluntary retirement with the balance being just general overall expenses.

Valuations are compelling. They missed a bit on the shorter haul side. Trading a little bit off here. A well run company but they have to do a few tweaks here. His preference is trucking companies and rails and likes TransForce and the CN/CP rails.

Fabulous entry point here. They had a weak quarter and stock sold off. Reason was they missed on margins from international priority and it was capacity issues which traditionally they are able to manage. They even make money in recessions. Thinks there is support in the stock.