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LivestreamMenuWe are buying 30 shares of FedEx at roughly $313.83 and 150 shares of FedEx Freight at roughly $152.63. Following the trades, Jim Cramer’s Charitable Trust will own 260 shares of FDX, increasing its weighting in the portfolio to about 2% from 1.75% and 400 shares of FDXF, increasing its weighting in the portfolio to about 1.5% from about 0.95%. We’re taking about half of the cash proceeds raised from our Nike exit made earlier Wednesday and redeploying those funds into FedEx and FedEx Freight, which was recently spun off into it a standalone company. FedEx is focused on parcel delivery, including the trucks that deliver packages to your door. FedEx Freight, on the other hand, provides less-than-truckload services — this is more business-to-business shipments that are too big for parcel delivery, but not large enough to require an entire trailer. FedEx is still trading slightly below where it traded before it reported noisy results last week. We added to our position the next morning after the quarter, and we still view this recent dip as an opportunity. The optics around the story have gotten a little complicated because the company transitioned to a new fiscal calendar and needs to recast its financials. That’s why we place more importance on management’s commentary and outlook, which all sounded strong with volume growth for the sixth straight quarter and margins improving when backing out fuel surcharges. FedEx also added to its streamlining and simplification story on Wednesday, selling its supply chain subsidiary in a deal that values the business at an enterprise value of $1.4 billion. The transaction lets FedEx focus even more of its resources on its parcel business and fast-growing end markets such as healthcare, data centers, automotive, and aerospace. Also last week, FedEx Freight reported a similarly noisy quarter due to the transition period, and we also added to our position the next day. FedEx Freight has two themes going for it. First is its separation from FedEx, which allows management to better focus on improving volumes, expanding revenue per shipment (known as yield), and driving cost efficiencies to expand margins. The other is the freight cycle, which has finally shown signs of getting better after a brutal, multiyear freight recession that began in 2022. Goldman Sachs initiated coverage of FDXF with a buy rating and a $186 price target on Wednesday, citing a stronger freight outlook and company-specific opportunities to grow. (Jim Cramer’s Charitable Trust is long FDXF and FDX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.Read More
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