Hi Doug,
The Shipping industry is being negatively impacted by all the supply chain issues that is currently affecting the global market place. They also appear to be having internal staffing and operational issues. As a result, it posted results that missed expectations and future guidance was below estimates. That being said, the company is certainly trading at attractive valuations here. Despite the current headwinds, it still expects to grow and these headwinds should be short term. They have been persisting for longer than expected however, so may continue into 2022.
I'm currently on the fence if its an add on the big dip and potential opportunity. It may take longer to play out depending on what happens with the supply chain bottle neck. There is also some concern that Amazon is taking some business away from them since they are doing their own logistics now. I am however, most concerned with the staff shortages and operational issues that is leading to higher costs.
The good news is that FedEx is still growing and it doesn't appear to be slowing down but these are risks to monitor. It is also important to note, that pre-pandemic FedEx was mired in a three-year downtrend so its not like it has been a multi-year top performer. Hence one of my hesitations with the company. It wasn't exactly performing pre-pandemic, so why can we expect it to perform now? Despite this poor performance it got swept up in the entire market momentum towards new highs. So this pull back is actually probably pretty healthy.
Mat