Options Trade – FedEx Corp. (FDX) Sunday, December 30, 2012

FedEx Could Deliver Big Gains!

**OPTION TRADE: Buy the FDX Jul 2013 105.000 call (FDX130720C00105000) at or under $1.50, good for the day. Place a protective stop limit at $0.70 and a pre-determined sell at $3.00.

by Ian Harvey

December 30, 2012

Introduction

This company missed its fiscal Q2 earnings estimate by a penny due to Superstorm Sandy. But S&P maintains its fiscal year (FY) 2013 (ending in May) estimate of $6.50 and looks for $8.02 in FY 2014 with a 12-month target price of $122.

FedEx Corp. (NYSE:FDX) — provides transportation, e-commerce, and business services in the United States and internationally. It operates in four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services. The company was founded in 1971 and is headquartered in Memphis, Tennessee.

Key Statistics for FDX

Current P/E Ratio (ttm) 14.1677
Estimated P/E(05/2013) 14.1922
Relative P/E vs. SPX 0.9932
Earnings Per Share (USD) (ttm) 6.3800
Est. EPS (USD) (05/2013) 6.3690
Est. PEG Ratio 1.2740
Market Cap (M USD) 28,424.18
Shares Outstanding (M) 314.46
30 Day Average Volume 1,993,771
Price/Book (mrq) 1.8325
Price/Sale (ttm) 0.6555
Dividend Indicated Gross Yield 0.62%
Cash Dividend (USD) 0.1400
Last Dividend 11/19/2012
5 Year Dividend Growth 7.12%
Next Earnings Announcement 03/22/2013
mrq = Most Recent Quarter; ttm = Trailing Twelve Months

Financials

Next reporting dateMarch 20, 2013
EPS forecast (this quarter)$1.40
Annual revenue (last year)$42.7B
Annual profit (last year)$2.0B
Net profit margin4.76%

Growth & Valuation

Earnings growth (last year)+39.96%
Earnings growth (this year)-2.79%
Earnings growth (next 5 years)+11.40%
Revenue growth (last year)+8.59%
P/E ratio14.5
Price/Sales0.66
Price/Book1.93

Analysts Recommendations

  current 1 Month Ago 3 Months Ago
BUY 18 19 19
OVERWEIGHT 2 1 1
HOLD 9 9 9
UNDERWEIGHT 0 0 0
SELL 0 0 0
MEAN Overweight Overweight Overweight

Technical Reasons for FDX Progression

Technically, FDX has been consolidating in a saucer (rounding bottom) pattern for almost a year. Since October, upside volume has increased dramatically, and the stock executed a golden cross (long-term bullish signal) in November.

A break through the February closing high at $96.96 should result in an easy trade to $110. But the stock is volatile, so buy under the $92 price is important.

Therefore, based on the facts above the following options trade is recommended…..


**OPTION TRADE: Buy the FDX Jul 2013 105.000 call (FDX130720C00105000) at or under $1.50, good for the day. Place a protective stop limit at $0.70 and a pre-determined sell at $3.00.



”Success is simple. Do what's right, the right way, at the right time.”


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Options traders win because they are successful.



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