Recent economic data shows that inflation is slowing. And that consumers are holding up well, as is the job market. That suggests the economy could trend higher next year.
Should that happen, there are a number of companies that stand to benefit. That includes companies that cater to the movement of goods and services across the economy. These companies have seen a drop with a slowdown in spending on goods in 2023, but stand to see improving conditions next year.
Among global logistics leaders, FedEx (FDX) is the key player.
While the company’s operations have fluctuated heavily over the past few years, the market is giving investors a discount following its latest earnings. That’s because the movement of goods has still been slower than economic activity would otherwise suggest.
However, with FedEx trading at 15 times earnings, and at 0.8 times their price to sales, it’s clear that shares can trend higher as the company’s operations improve.
Action to take: Shares of FedEx are still a buy, even with the stock near a 52-week high. At current prices, shares pay a 1.8 percent dividend yield, with a history of increased payouts over time.
For traders, playing the current uptrend should work well in the months ahead.
The March 2024 $300 calls, last going for about $7.40, could see mid-to-high double-digit gains depending on the strength of the current rally in shares into the new year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.