top of page

Why I'm Avoiding This Stock

This past week, I had an experience dealing with this shipping company. From needing an account number to jumping through hoops with customer service, I was turned off by this corporation. Who am I talking about?

I'm referring to FedEx, where I was confused about how I could have a work package picked up without doing website gymnastics. Instead of getting concise answers, I got an outdated help center that provided me with no answers. I was also locked out of the site (I'm assuming it was a technical error) while trying to finish my account. In short, it was a disaster of epic proportions.

But there are other reasons why I'm bearish on FedEx. Here are a few reasons why I'm staying away from this stock.

  1. Global Trade: FedEx, like many delivery services, is vulnerable to global trade downturns. There are also U.S. and Europe macroeconomic conditions to worry about for the Memphis-based company. With the Russia-Ukraine conflict, these factors will only worsen. What's happening across the globe could derail the shipping company's success, especially if its closest competitor, UPS, figures out solutions to this problem.

  2. Minor Issues: Another issue the Memphis-based corporation is dealing with is miscellaneous details, such as the labor market. Increasing costs in the market along with problems within the network are beginning to pile up. Just take the help center as an example. Not being updated on what to do with your account and parcels can be a pain to deal with. Such problems cause inefficiencies to arise, putting FedEx at a disadvantage.

  3. UPS: Their oldest competitor has plenty of advantages to buying the stock over FedEx. For one, it's less expensive at $185.40 a share and pays a better dividend (2.74). But there are business advantages that UPS carries over their rival, such as superior parcel density and more reliable ground and express shipments. The Atlanta-based company is even hitting a home run in this aspect by delving into current e-commerce trends, making it a better buy. But there's no bigger threat to FedEx than...

  4. This Guy:

Yep, Jeff Bezos and Amazon have carved out ridiculous advantages over any competitor in its space, making them nearly untouchable. That includes building out its last-mile logistics capabilities and having a plethora of distribution centers across the country, making it THE go-to source for such an endeavor. With these reasons and Andrew Jassy now taking the Amazon helm, it creates new problems for anyone else in the delivery sector.

bottom of page