FedEx Freight Holding Company, Inc. (NYSE:FDXF) was among the stocks Jim Cramer discussed during Mad Money, as he called the growing wave of stock offerings and debt issuance a threat to the bull markett. Cramer gave his long-term thesis on the business, as he said:
Now, let’s talk about FedEx Freight, which, you know, really had the more dramatic pullback… Just like with FedEx, though, I’m not worried. FedEx Freight’s been getting slammed because this is what happens right after this kind of corporate breakup. FedEx gave all the shareholders a chunk of FedEx Freight, right? So you’re a FedEx shareholder. Suddenly you get this FedEx Freight, and you don’t know what it is. You just say, “Oh, I don’t need this little thing,” and you throw it away. It causes a temporary beat down… FedEx Freight’s now experiencing, I’d say what I think is a level where it reminds me very much of reverse and bottom. Doesn’t help that when the company reported on June 25th, though, the numbers were quirky… and the stock fell nearly 3% the next day.
Quirky because I don’t want to be too, I want to be a little more subjective about this. See, FedEx Freight offered limited numbers in its first report as a public company. There was no earnings per share figure, but what we did was get at least pretty solid, I thought… Making things worse, FedEx Freight also gave odd guidance. Like their old parent company, they moved from a fiscal year ending in May to a standard calendar year. Now, they’re in a transition period, the seven months from June through December, because their fiscal 2026 is over but the new calendar doesn’t… [start] until 2027 in January…
My thesis is much more simple and much longer term. FedEx Freight is instantly the largest player in the less-than-truckload market, which is an attractive one as the freight business comes out of a multi-year bear market with much less capacity, kind of what happened to the airlines. I think FedEx Freight also benefits from being an independent company with dedicated management that can think solely about how to improve service and grow the business rather than being buried within a larger entity where its profitability was not a priority. That’s why I want to own this one for the long haul.
Photo by Yiorgos Ntrahas on Unsplash
FedEx Freight Holding Company, Inc. (NYSE:FDXF) provides less-than-truckload freight transportation services.
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