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David Herro and Bill Nygren Comment on FedEx

January 13, 2014 | About:
Holly LaFon

FedEx (FDX) was the top contributor for the quarter, returning 26%.  FedEx reported solid second quarter results; its express division alone generated 140 basis points of year-over-year margin improvement.  These results show that their cost-savings plans are continuing to gain traction.  The ground division also performed well, producing 8% year-over-year volume growth.  This marked the 55th consecutive quarter that the ground division has gained market share – a trend that should continue for many more years.  Management also improved profitability and deployed the company’s excess capital into what we believe are value-creating activities.  When we initially invested in FedEx, we believed that the company could substantially improve its margins and capital allocation, and we are pleased that management executed on – and the market appropriately recognized – such opportunities for sustained value growth. 

From the Oakmark Global Select Fund fourth quarter 2013 commentary.


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