FedEx is a shipping carrier that can deliver to almost any address in the U.S. and Europe.

FedEx currently has a below market multiple of 16X P/E ratio while the market is currently at around 19X P/E ratio. We expect FedEx to be able to grow earnings above the average S&P 500 company. FedEx in our view can grow earnings 15% - 20%, while we see the S&P 500 companies on average growing 8% earnings.

FedEx has pricing power due to its size and the scale of its customer. Many customers are individuals or small businesses, and FedEx only competes with 1 – 3 other businesses. The scale of pricing power is not enough to deter customers from switching to its competitor(s) in our view.

Given that FedEx currently has the ability to generate above market earnings, and has a below market P/E multiple, this usually results in superior returns that outpace the S&P. We give FedEx a high rating, and think this stock can be a home run.