Guru Mason Hawkins (Trades, Portfolio) added 241,024 shares of FedEX (FDX, Financial) for an average price of $163.73 per share during the third quarter. The trade had a 0.4% impact on Southeastern Asset Management’s portfolio, a global investment firm Hawkins manages and founded in 1975.
FedEx’s market price has climbed an estimated 19% since the third quarter. Since the first quarter of 2010, Hawkins has gained an estimated 77% with his investment in FedEx.
FedEx delivers packages via air, ground and sea across the world. They operate in more than 220 countries and territories, linking more than 90% of the world’s GDP.
FedEx has a market cap of $51.96 billion, a price-earnings (P/E) ratio of 29.11, an enterprise value of $62.91 billion, a price-book (P/B) ratio of 3.72 and a quick ratio of 1.46.
According to GuruFocus, FedEx has a 6 of 10 financial strength rating with a cash to debt ratio of 0.22, an equity to asset ratio of 0.31 and an interest coverage 8.76. The Piotroski F-Score of 6 suggests the company is in a healthy business situation. FedEx also has a 6 of 10 profitability and growth rating with an operating margin of 6.06%, a net margin of 3.49%, a return on equity (ROE) of 12.69%, a return on assets (ROA) of 4.49% and three-year revenue growth of 8.90%.
Southeastern Asset Management commented on FedEx on Oct. 14:
"FedEx (NYSE:FDX) (+15%; +1.2%), the global transportation and logistics company, was a leading contributor. The company reported strong results across the board, with an increase in margins in its Express and Ground divisions. Ground had 10% growth in average daily volumes year-over-year and announced a price increase of 4.9% in 2017, once again demonstrating the company’s strong pricing power even in a time of low inflation.
Management indicated that the integration of TNT, which the company acquired in May of this year, would generate at least $750 million of annual synergies across its network over the next few years. The company’s tax rate should also benefit from more profits based in Europe. The company raised guidance for fiscal year 2017 and continued to buy back shares. Our appraisal increased, and in spite of the price appreciation, the stock remains significantly discounted."
Below is a Peter Lynch chart that shows FedEx is trading above its intrinsic value.
Disclosure:Ă‚ Author does not own any shares of this company.
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