FedEx: A Case Study In Contrarian Investing

Introduction FedEx (FDX)

Contrarian investing requires extra due diligence to identify traits that give investors confidence and conviction to invest in a company when everything and everyone is against it.

Not all companies that are in the doghouse are investable.

Quality always matters and identifying characteristics that set these companies apart from their peers is critical for the Contrarian Investor to zig when others zag.

In this article, we examine FedEx (FDX) as a classic Contrarian play.


Any serious investor is always on the hunt for great companies to own. However, finding these great companies may not be easy. Even harder is to buy them at fair, or better still, at prices much lower than their intrinsic value, the classic “paying 50 cents for a dollar” investment. This is when the investment offers the margin of safety value investors always look for.

Intuitively, investors know that great companies will often trade at a premium. Conversely, less great companies trade at lower multiples to reflect the higher risks and lower quality associated with them.

Occasionally, there are times when great companies are sold on the cheap, and these times are usually associated with negativity. It could be some adverse news, like a class action lawsuit in the case of 3M (MMM). It could be how Amazon’s (AMZN) share price fell 8% after reporting weak earnings. Share prices could fall due to threats from the competition like Alphabet (GOOGL) reacting to Microsoft’s (MSFT) investment in Chat GPT.