During the September 9 episode of Mad Money, a caller asked for guidance on managing a sizable underwater position in FedEx Freight Holding Company, Inc. (NYSE:FDXF) heading into its upcoming earnings report following recent stock volatility. Jim Cramer replied:
Okay, now, what we’re doing is we’re holding back to buy more. You see, it’s still a small position. We can’t seem to be able to get out from under the oil price. It’s trading with oil. It shouldn’t… It has not been a successful investment so far. I don’t hide that… But we are not adding to the position yet until we see a bottom and we see oil start coming down. It’s one of those stocks that we just want to have as a hedge in case oil does go down.
Freight Volumes Remain a Key Concern
FDXF shares closed at $124.79 on September 9, down 3.32%, as transportation stocks fell while oil prices reached a four-month high. The pressure on FedEx Freight Holding Company, Inc. extends beyond fuel. Fiscal 2026 revenue fell 1.1% to $8.795 billion, while operating income on a carve-out basis declined about 62% to $540 million. Average daily shipments fell 4%, with the company citing weaker demand, continued weak industrial production, trade-policy uncertainty, and excess capacity in the LTL industry.
Management said demand was softer than expected, but that volume trends had improved sequentially. CEO John Smith said the company was encouraged by early signs that demand may be stabilizing, while CFO Marshall Witt said demand was “a little bit softer than we initially anticipated.” The fiscal fourth quarter also showed the limits of the revenue increase. Revenue rose 4.8% to $2.4 billion, primarily from higher fuel surcharges and weight per shipment, while average daily shipments declined 5.9%. Adjusted operating income fell 23.9% to $363 million.
Margins Face Multiple Pressures
The bearish case is that FedEx Freight Holding Company, Inc. needs to improve underlying demand and margins while dealing with elevated standalone costs and a still-weak freight environment. Fiscal 2026 operating income fell sharply, while fourth-quarter adjusted operating income declined despite higher revenue. The company also said fourth-quarter results were affected by lower shipments, planned incremental separation costs, and higher wage rates. That leaves the business exposed to further pressure if freight volumes remain weak or operating costs stay elevated.
Institutional Positioning and Short Interest
Insider Monkey, which tracks more than 1,000 hedge funds, showed 54 hedge fund holders in the second quarter. Its short interest stood at 3.53% of the float. Cramer’s stance leaves FedEx Freight Holding Company, Inc. as a wait-and-see position rather than a buy at current levels. Until oil prices ease and freight demand shows clearer signs of recovery, he wants to see a bottom in the shares before adding to his position.
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