FedEX - share price heavily discounted - should we consider?

FedEX, which is one of the world's largest courier companies has seen its share price plummeting in 2018 on fears of slowing global economic growth and trade tensions between US and China. FedEX suffered a lot from this since the company has a substantial presence in China. To strengthen its foothold in the country, last January, it opened a hub in Shanghai.

The shares have dropped circa 43% from their 52-week high and have closed the year down 35%!

The company has also recently reduced its earnings guidance for 2019 and this has enhanced the fear in the stock.

As we can see from a snapshot of its financials below, the company has been increasing its earnings every year and is currently rated as undervalued by Morningstar. The company currently pays a dividend of around 2.6%.

From a technical standpoint the price is currently sitting on a trend line which goes back to mid 2009 and also on a support from way back in 2015.

RSI is showing us a strong undervalued signal whilstMACD is very close for a cross over.

All the signals are currently pushing for a LONG although personally I will be waiting a bit to see if the trend line will hold for some time especially on the fact of next week's summit between US and China.

If the talks are positive and the trend line holds, then I think it is a very good opportunity to buy a strong company at such discounted price.

1 - Comment

Christian Buhagiar

Christian Buhagiar - 09/01/2019 15:44 Reply