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FedEx Earnings Puts ETFs in Focus

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After the closing bell on Dec 16, transport bellwether FedEx FDX delivered mixed fourth-quarter fiscal 2022 results. The courier company missed on earnings but beat the revenue estimates. The parcel company issued a stronger-than-expected full-year forecast for fiscal 2023.

Driven by a solid outlook, FDX shares climbed 2.5% at the close in after-market hours. As a result, ETFs with the highest allocation to FedEx are expected to gain. These include First Trust Nasdaq Transportation ETF FTXR, American Customer Satisfaction ETF ACSI, ProShares Supply Chain Logistics ETF SUPL, iShares U.S. Transportation ETF IYT, and Pacer Industrials and Logistics ETF SHPP.

FedEx Earnings in Focus

Earnings per share came in at $6.87, missing the Zacks Consensus Estimate of $6.91 but jumping 32% from the year-ago earnings. Revenues grew 8% year over year to $24.39 billion and edged past the estimated $24.28 billion. Higher shipping rates and fuel surcharges more than offset a smaller volume of packages shipped.

For fiscal 2023, FedEx issued earnings per share guidance to $22.45-$24.45, the mid-point is well above the Zacks Consensus Estimate of $22.57 (see: all the Industrials ETFs here).

FedEx carries a Zacks Rank #3 (Hold) and has a VGM Score of A. It belongs to a bottom-ranked Zacks Industry (top 44%).

ETFs in Focus

Let’s delve into each ETF below:

First Trust Nasdaq Transportation ETF (FTXR)

First Trust Nasdaq Transportation ETF offers exposure to the 30 most-liquid U.S. transportation securities based on volatility, value and growth by tracking the Nasdaq US Smart Transportation Index. FedEx holds an 8% share in the basket. Trucking, railroads, auto parts, airlines, and delivery services occupy the top spots in the basket (read: A Look at Transport ETFs Post Q1 Earnings).

First Trust Nasdaq Transportation ETF has amassed $105.1 million in its asset base and charges 60 bps in annual fees. The average trading volume is moderate at 95,000 shares. The fund has a Zacks ETF Rank #2 (Buy).

American Customer Satisfaction ETF (ACSI)

American Customer Satisfaction ETF seeks to track the performance of the American Customer Satisfaction Investable Index, which utilizes proprietary customer satisfaction scores to weight stocks within each sector by their relative customer satisfaction scores. It holds stocks in its basket, with FedEx occupying the second position with a 5.3% share.

American Customer Satisfaction ETF has accumulated $65.1 million in its asset base while trades in a meager average daily volume of under 500 shares. It charges 65 bps in annual fees.

ProShares Supply Chain Logistics ETF (SUPL)

ProShares Supply Chain Logistics ETF is the first ETF focused exclusively on the companies poised to potentially benefit from the transformation of how raw materials and goods move around the world. These logistics companies include leading global shipping, railroad, air and trucking companies that collectively touch every point of the supply chain. It follows the FactSet Supply Chain Logistics Index, charging investors 58 bps in annual fees. ProShares Supply Chain Logistics ETF holds 41 stocks in its basket, with FedEx taking the top spot at 5.3% of assets.

ProShares Supply Chain Logistics ETF has AUM of $1.8 million and trades in volume of 2,000 shares per day.

iShares U.S. Transportation ETF (IYT)

iShares U.S. Transportation ETF tracks the S&P Transportation Select Industry FMC Capped Index, giving investors exposure to a small basket of 49 securities. Of these, FedEx occupies the fourth position with 5.2% of the assets. Within the transportation sector, air freight and logistics and railroads take the top two spots with 32.2% and 31.9% share, respectively, while trucking (19.5%) and airlines (14.7%) round off the next two (read: 5 Sector ETFs to Win From 8.6% U.S. Inflation).

iShares U.S. Transportation ETF has accumulated $778.6 million in AUM while it sees a good trading volume of around 311,000 shares a day. The fund charges 41 bps in fees per year and has a Zacks ETF Rank #2 with a Medium risk outlook.

Pacer Industrials and Logistics ETF (SHPP)

Pacer Industrials and Logistics ETF tracks the Pacer Global Supply Chain Infrastructure Index, which aims to offer investors exposure to globally-listed stocks and depositary receipts involved in the support and functioning of global distribution supply chains. It holds 104 stocks in its basket, with FedEx occupying the eighth position with a 4.1% share.

Pacer Industrials and Logistics ETF is newly debuted in the space this month and charges 60 bps in annual fees.


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