Is it Safe to Keep Your FedEx (FDX) Shares?

·2 min read

Artisan Partners, a high value-added investment management firm, published its “Artisan Value Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. A return of -1.33% was recorded by its Investor Class: ARTLX, -1.28% by both its Advisor Class: APDLX, and Institutional Class: APHLX for the third quarter of 2021, all below the Russell 1000® Value Index that delivered a -0.78% return, and the Russell 1000® Index that gained 0.21% for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Artisan Value Fund, in its Q3 2021 investor letter, mentioned FedEx Corporation (NYSE: FDX) and discussed its stance on the firm. FedEx Corporation is a Memphis, Tennessee-based transport company with a $65.0 billion market capitalization. FDX delivered a -5.61% return since the beginning of the year, while its 12-month returns are down by -17.50%. The stock closed at $245.05 per share on December 06, 2021.

Here is what Artisan Value Fund has to say about FedEx Corporation in its Q3 2021 investor letter:

"Our weakest Q3 performers included FedEx. Shares of FedEx, a global shipping and logistics firm, were held back by disappointing business results as labor cost headwinds and air network disruptions overshadowed solid top-line trends. We think the company should be able to overcome these near-term issues. Importantly, FedEx has strong pricing power as it operates in a consolidated global shipping industry. In September, the company announced it would increase its shipping rates by an average of 5.9% across most of its services, which is the first time in several years that its annual increase would exceed 5.0%. The industry’s renewed pricing discipline is a welcome change, reflecting a broader commitment to earn better returns on invested capital. FedEx is also closer to fully integrating TNT, a European-focused parcel company it acquired in 2016. The market is beginning to incorporate a higher probability FedEx will fully integrate TNT, which will provide a significant boost to profits. The stock now trades at a near-trough multiple of less than 12X 2022 earnings, so we added to our position on weakness."

Based on our calculations, FedEx Corporation (NYSE: FDX) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. FDX was in 49 hedge fund portfolios at the end of the third quarter of 2021, compared to 61 funds in the previous quarter. FedEx Corporation (NYSE: FDX) delivered a -7.89% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.

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