TipRanks

Notifications

Shipping Season Warms Up

Retailers and shipping companies have been blaming the awful winter weather for their recent disappointing quarterly earnings. International shipping company, FedEx (FDX), even noted that their third quarter fiscal 2014 earnings results were “significantly impacted by mother nature’s frigid temperatures and massive amounts of snow.” However, FedEx said it could have been much worse, reporting that they did “marginally growth both metrics [profit and revenue] beyond its 2013 levels.”

Chris W

FedEx reported a 3% increase in third quarter revenue, from $11 billion in revenue in 2012 to $11.3 billion in 2013. With the support of positive numbers, Citigroup analyst Christian Wetherbee noted that, “ultimately, weather should not be the focus, with the solid forward guidance a significantly more important indicator of management’s progress toward Express improvement.” Christian recently recommended BUY FDX on March 19.

Chris rec

Christian is no stranger to shipping companies, recommending Knight Transportation (KNX) and Safe Bulkers (SB) with success. These recommendations have helped earn Christian a +4% average return over S&P-500 and a 63% success rate of recommendations.

Back in December 2013, Christian experienced a loss of -4.3% over S&P-500 when he recommended BUY FDX. However, Christian’s previous recommendation to BUY FDX earned him +14.8% over S&P-500 and contributed to his 66% success rate of FDX recommendations! This recommendation to BUY FDX followed the company’s F1Q14 results where he noted, “We view F1Q14 results positively as Express posted YoY improvement in operating profit and operating margin despite facing a fuel surcharge headwind , which we estimated to be ~$36m.”

The analyst also earned high returns when he recommended BUY Knight Transportation (KNX) this January. Christian upgraded KNX from HOLD to BUY and increased his price target from $17 to $22 noting, “we believe continued economic growth and Hours of Service restricted capacity could drive improvement in TL fundamentals, potentially aiding yield growth and margins.” This recommendation earned Christian +15. 7% over S&P-500.

When Christian recommended BUY Safe Bulkers (SB) in November of 2013, he earned +17.1% over S&P-500. Christian upgraded the company from a Neutral rating to a BUY rating arguing, “the company is well positioned to grow earnings and cash flow from early improvements in dry bulk fundamentals. The company has also been successful preserving balance sheet flexibility through the downturn, allowing for accretive growth from its pipeline of 10 newbuild deliveries.”

As shipping companies start to face the warmer weather, Christian is confident that FedEx will continue to perform well. To continue to follow Christian’s recommendations as the shipping-ways begin to thaw, download TipRanks and start making informed decisions with advice you can trust.

Tags:

Leave a Reply

Leave a Reply