The past year has been a challenge for investors. While tech stocks have been soaring, the data suggests that the real economy has been muted. Consumer spending is weak and trending lower. The labor market is showing a similar decline.
However, one industry leader has just indicated that business is faring well. And that could be a sign that the economy will continue to hold up, even with today’s lackluster data.
The industry leader is shipping and logistics giant FedEx (FDX). Shares hit a new 52-week high this week on the back of strong earnings, guidance, and analyst upgrades.
Freight is tied to moving physical goods around in the real economy, making the FedEx news bullish. Shares are now up about 15% over the past year, and the stock trades at a compelling 12 times forward earnings.
Plus, FedEx announced a big stock buyback plan, which could help keep a floor under share prices going forward.
Action to take: With the latest earnings, it’s clear that FedEx can continue higher, and break to new highs in the months ahead. Momentum investors may want to buy a stake here. FedEx also pays a 2.1% dividend at current prices.
For traders, the September $320 calls, last trading for about $5.90, could see mid-double-digit returns from a continuation higher for shares in the coming months.
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 company mentioned in this article.