5 Transportation as a Service Stocks to Buy

2. FedEx Corporation (NYSE: FDX)

Number of Hedge Fund Holders: 63    

FedEx Corporation (NYSE: FDX) is a Tennessee-based delivery services company founded in 1971. It is placed second on our list of 10 transportation as a service stocks to buy. FedEx stock has returned more than 162% to investors over the past twelve months. The firm has operations in 220 countries and offers express transportation, small-package ground delivery, and freight transportation. It markets supply chain management solutions and global ocean and air freight forwarding services. 

On May 5, FedEx Corporation (NYSE: FDX) announced that it would be becoming the official sponsor of popular European footballing competition UEFA Champions League for three years. FedEx shares jumped more than 1% after the announcement. 

At the end of the fourth quarter of 2020, 63 hedge funds in the database of Insider Monkey held stakes worth $2 billion in the firm, down from 71 in the preceding quarter worth $2.5 billion. 

In its Q4 2020 investor letter, Longleaf Partners Fund highlighted a few stocks and FedEx Corp (NYSE:FDX) is one of them. Here is what the fund said:

“FedEx (76%, 3.69%; 3%, 0.29%), the global logistics company, was the top contributor in 2020 after an outstanding year for the business that wasn’t simply the result of COVID, even if the company has been a strong beneficiary of the rapid societal changes driven by it. The share price returned over 85% in the last six months. Over the last quarter, Ground revenues increased 38%, while operating income grew 61%, despite another round of heavy investments weighing down margins temporarily into the single-digits. The company is indispensable for the United States’ e-commerce deliveries and is reaping the rewards of its investments in previous years to gear up for 7-day delivery. The Express segment is still benefitting from fewer passenger flights diminishing competing underbelly capacity. Despite the sharp appreciation, the stock trades at a reasonable mid-teens P/E multiple on forward earnings, and we expect the value to grow double-digits annually from here. FedEx has done its part to give back this year in the face of COVID. Since the onset of the pandemic, FedEx has delivered more than 55 kilotons of personal protective equipment, including more than two billion face masks, and more than 9,600 humanitarian aid shipments around the globe. More recently, FedEx was tapped to deliver the first wave of Pfizer-BioNTech vaccines across the US, and its infrastructure will be critical to successfully disseminating the vaccines.”