Thursday, February 23, 2006

Fed Ex Still En Fuego

This stock is white hot -- Fed Ex (FDX) hit another 52 week high this morning.

On Tuesday, we made the case that Fed Ex is nowhere near topping out:

Fed Ex is an indisputable leader in the global business-to-business express delivery space.The firm is aggressively expanding, cutting costs, and doing just about everything a strong operation is supposed to be doing to improve profitability.

Although UPS (UPS) isn't as levered to the air cargo & freight business (which demands higher Cap Ex and fluctuates accordingly with fuel spikes), it's clear that investors are optimistic about Fed Ex's ability to compete with its long time arch-nemesis, even as the latter sustains its higher margin categories and keeps the European market on lock-down. In any event, Fed Ex's chart looks better, corroborating our feeling that stronger bullish sentiment exists among the Fed Ex crowd and that there is less upside in UPS.

UPS is down today, of course. On a pullback, Fed Ex is a no brainer.

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