On tonight's MadMoney (here) analyst Jim Cramer suggested that FedX (FDX), given its better than expected profits in 2011, is doing three things right: (1) Expanding outside the U.S., (2) Expanded its aircraft fleet and improved its technology and (3) Positioning itself as the "Internet play on transportation".
To the Random Stock Walker, this commentary suggests that FDX should be strongly driven by fundamentals in the world economy. In fact, the world-economy model did win out over all the other competitors (see below).
The forecast out to 2015 indicates continued growth or, at worst (the lowest 98% confidence interval) value maintenance.
The forecast out to 2015 indicates continued growth or, at worst (the lowest 98% confidence interval) value maintenance.
In the graphic above, the FDX attractor is plotted with confidence intervals. The stock is currently just slightly above the attractor value (91.44 at close today). It's being overwhelmingly rated a BUY by analysts (here). Price targets should keep climbing over 100 for the next few years.
TECHNICAL NOTE: FDX is one of the unusual stocks where the forecasting model and the attractor model were both driven by the same input variables, in this case the state of the world economy. The bootstrap confidence intervals P[96.83, AIC=102.1,106.7] for the AIC criterion measure are clearly better than any other model (random walk, business-as-usual, US economy, Sp500 or FDX volume) with AICs all above 1200.
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