FDX

Thinking Slow: 3 Research Blind Spots That Changed the Investment World

by

Dear members: — Daniel Kahneman in his text Thinking, Fast and Slow (1) divided the human psyche into two systems. The first system is instinctive and emotional, often set on autopilot, while the second system is slower and more logical, requiring a calculating conscious. Many of the maxims the investment world takes for granted today suffer from conclusions that are made rapidly, almost without thinking, driven by our first system, creating what I call research blind spots. — In World War II, Allied bombing raids were suffering from very high casualty rates. It was estimated that for those pilots that were flying at the beginning of the war, only about 10% survived, a terrible loss rate. Bombing was crucial to the Allied … Read more

UPS May Cut Its Lofty Dividend

by

Image Source: TradingView By Brian Nelson, CFA United Parcel Service (UPS) recently posted second quarter results that were mixed with revenue beating the consensus forecast, but non-GAAP earnings per share coming up short. Second quarter consolidated revenues were $21.2 billion, while consolidated operating profit was $1.8 billion, or $1.9 billion on a non-GAAP adjusted basis. It posted a non-GAAP adjusted consolidated operating margin of 8.8% in the period. Diluted earnings per share came in at $1.51 for the quarter, while non-GAAP adjusted diluted earnings per share were $1.55. Management had the following to say about the results: I want to thank all UPSers for their dedication and hard work in what continues to be a dynamic and evolving trade environment. … Read more

Dividend Increases/Decreases for the Week of June 13

by

Below we provide a list of firms that raised their dividends during the week ending June 13. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week                          AGNC Investment Corp. 6.5% DP SH PFD E (AGNCO): now $0.6013 per share quarterly dividend, was $0.5976. AGNC Investment Corp. 6.875 DEP REP D (AGNCM): now $0.5595 per share quarterly dividend, was $0.5563. AGNC Investment Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (AGNCN): now $0.6088 per share quarterly dividend, was $0.6050. AGNC INVT 1000 DR REP 1 SRS F PRF (AGNCP): now $0.5826 per … Read more

3 Undervalued Stocks to Consider Buying Now

by

Dear readers:   With the markets retracing most of their recent drawdown, we’re taking a victory lap as we didn’t panic, nor should have you. We highlighted our wait-and-see approach amidst the worst of the pullback, and we expect the Magnificent 7 (large cap growth and big cap tech) to continue to propel the markets higher, as they have done.   We’ve been busy rolling valuation models as we finetune our assumptions for a great number of companies under coverage. While doing so, we came across three undervalued stocks that are also included in the simulated newsletter portfolios. We think they’re prime for highlight.   The three stocks are UnitedHealth Group (UNH), Nvidia (NVDA) and Alphabet (GOOG). We spend a lot of time on discounted cash-flow valuation, … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

by

By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more

Trump Tariffs Higher than Expected; What We’re Doing

by

By Brian Nelson, CFA The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in … Read more

FedEx Lowers Outlook Again

by

Image Source: TradingView By Brian Nelson, CFA On March 20, FedEx (FDX) reported mixed third quarter results for fiscal 2025, with revenue edging out the consensus forecast and non-GAAP earnings per share missing the mark. Revenue increased 2.3%, while operating income expanded to $1.29 billion from $1.24 billion in last year’s quarter. FedEx’s operating margin edged up to 5.8% from 5.7% in the year-ago quarter. Net income increased to $0.91 billion from $0.88 billion, while diluted earnings per share came in at $3.76 from $3.51 in last year’s quarter. Management had the following to say about the quarter: The FedEx team delivered improved profitability, while navigating a very challenging operating environment, including a compressed Peak season and severe weather events. … Read more

FedEx Lowers Fiscal 2025 Guidance Again, Plans to Separate FedEx Freight

by

Image: FedEx’s shares have come roaring back since its bottom in the back half of 2022. By Brian Nelson, CFA FedEx (FDX) recently reported mixed fiscal second quarter results with the company missing on the top line, but beating the consensus forecast for non-GAAP earnings per share. Non-GAAP adjusted revenue fell to $22 billion from $22.2 billion in the prior-year quarter, while adjusted operating income dropped to $1.38 billion from $1.42 billion in the same quarter of fiscal 2024. Its adjusted operating margin fell to 6.3% from 6.4%, while adjusted net income fell to $0.99 billion from $1.01 billion previously. Thanks to share buybacks, adjusted diluted earnings per share increased to $4.05 from $3.99 in the prior-year quarter. Here’s more … Read more

FedEx Reduces Fiscal 2025 Outlook

by

Image: FedEx’s shares have bounced back from the October 2022 lows, but its fiscal 2025 outlook disappointed the Street. By Brian Nelson, CFA FedEx (FDX) reported disappointing fiscal first quarter 2025 results on September 19 with both revenue and non-GAAP earnings per share coming in below the consensus forecast. Adjusted revenue fell to $21.6 billion from $21.7 billion in the year-ago period, while adjusted operating income fell to $1.21 billion from $1.59 billion in the same period last year. Our fair value estimate stands at $284 per share. FedEx’s adjusted operating margin contracted 170 basis points in the quarter on a year-over-year basis, while adjusted net income came in at $0.89 billion, down from $1.16 billion in last year’s quarter. … Read more

Paper: Value and Momentum Within Stocks, Too

by

Please select the image below to download, “Value and Momentum Within Stocks, Too:” Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks. To download the full report, please click here (pdf). ———- Actual results … Read more