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FedEx's Robust Results Put Transport ETFs in Focus
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After the closing bell on Mar 18, transport bellwether FedEx (FDX - Free Report) delivered stellar third-quarter fiscal 2021 results. The courier company beat on both earnings and revenues.
Earnings per share came in at $3.47, surpassing the Zacks Consensus Estimate of $3.21 as well as more than doubled the year-ago earnings. Further, revenues grew 23% year over year to $21.5 billion and also edged past the estimated $20 billion. Robust performances were driven by higher volume growth in U.S. domestic residential package services and FedEx International Priority. E-commerce boost and COVID-19 vaccines shipping fueled growth in the profits.
For fiscal 2021, the company expects earnings per share in the range of $17.60-$18.20. The lower end of the guidance is higher than the Zacks Consensus Estimate of $17.28 (read: 6 Sector ETFs at All-Time Highs Braving Tech Rout).
Driven by robust results and an upbeat outlook, FDX shares rose 4.4% in after-market hours. FedEx currently has a Zacks Rank #3 (Hold) and an impressive VGM Score of A.
ETFs in Focus
The FedEx earnings report put transport ETFs, namely iShares Dow Jones Transportation Average Fund (IYT - Free Report) , SPDR S&P Transportation ETF (XTN - Free Report) and First Trust Nasdaq Transportation ETF (FTXR - Free Report) in focus. All these funds currently have a Zacks ETF Rank #2 (Buy) (see: all the Industrials ETFs here).
IYT
The ETF tracks the Dow Jones Transportation Average Index, giving investors exposure to a small basket of 20 securities. Of these, FedEx occupies the top position with 11.3% of the assets. Within the transportation sector, railroads, and air freight and logistics take the top two spots with 33.8% and 26.8% share, respectively, while trucking (20.2%) and airlines (12.6%) round off the next two. The fund accumulated $1.8 billion in AUM while it sees a good trading volume of around 155,000 shares a day. It charges 42 bps in fees per year.
XTN
This fund follows the S&P Transportation Select Industry Index and uses almost an equal-weight methodology for each security. Holding 42 stocks with an AUM of $693.6 million, FedEx accounts for 1.9% share in the basket. The product is heavily exposed to trucking, which represents more than one-third of the portfolio while airlines, and air freight & logistics make up 29.4% and 19.5% share, respectively. The fund charges 35 bps in fees per year from investors and trades in a volume of about 104,000 shares a day, on average.
FTXR
This fund offers exposure to the 31 most-liquid U.S. transportation securities based on volatility, value and growth by tracking the Nasdaq US Smart Transportation Index. FedEx holds 6.4% share in the basket. Here, ground freight & logistics takes the largest share at 31.3% followed by auto & truck manufacturers (29.7%), auto, truck & motorcycle parts (18.7%) and air freight & courier services (13.5%). FTXR amassed $1 billion in its asset base and charges 60 bps in annual fees. The average trading volume is moderate at 180,000 shares (read: 10 Sector ETFs Flying Higher on a Recovering Economy).
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FedEx's Robust Results Put Transport ETFs in Focus
After the closing bell on Mar 18, transport bellwether FedEx (FDX - Free Report) delivered stellar third-quarter fiscal 2021 results. The courier company beat on both earnings and revenues.
Earnings per share came in at $3.47, surpassing the Zacks Consensus Estimate of $3.21 as well as more than doubled the year-ago earnings. Further, revenues grew 23% year over year to $21.5 billion and also edged past the estimated $20 billion. Robust performances were driven by higher volume growth in U.S. domestic residential package services and FedEx International Priority. E-commerce boost and COVID-19 vaccines shipping fueled growth in the profits.
For fiscal 2021, the company expects earnings per share in the range of $17.60-$18.20. The lower end of the guidance is higher than the Zacks Consensus Estimate of $17.28 (read: 6 Sector ETFs at All-Time Highs Braving Tech Rout).
Driven by robust results and an upbeat outlook, FDX shares rose 4.4% in after-market hours. FedEx currently has a Zacks Rank #3 (Hold) and an impressive VGM Score of A.
ETFs in Focus
The FedEx earnings report put transport ETFs, namely iShares Dow Jones Transportation Average Fund (IYT - Free Report) , SPDR S&P Transportation ETF (XTN - Free Report) and First Trust Nasdaq Transportation ETF (FTXR - Free Report) in focus. All these funds currently have a Zacks ETF Rank #2 (Buy) (see: all the Industrials ETFs here).
IYT
The ETF tracks the Dow Jones Transportation Average Index, giving investors exposure to a small basket of 20 securities. Of these, FedEx occupies the top position with 11.3% of the assets. Within the transportation sector, railroads, and air freight and logistics take the top two spots with 33.8% and 26.8% share, respectively, while trucking (20.2%) and airlines (12.6%) round off the next two. The fund accumulated $1.8 billion in AUM while it sees a good trading volume of around 155,000 shares a day. It charges 42 bps in fees per year.
XTN
This fund follows the S&P Transportation Select Industry Index and uses almost an equal-weight methodology for each security. Holding 42 stocks with an AUM of $693.6 million, FedEx accounts for 1.9% share in the basket. The product is heavily exposed to trucking, which represents more than one-third of the portfolio while airlines, and air freight & logistics make up 29.4% and 19.5% share, respectively. The fund charges 35 bps in fees per year from investors and trades in a volume of about 104,000 shares a day, on average.
FTXR
This fund offers exposure to the 31 most-liquid U.S. transportation securities based on volatility, value and growth by tracking the Nasdaq US Smart Transportation Index. FedEx holds 6.4% share in the basket. Here, ground freight & logistics takes the largest share at 31.3% followed by auto & truck manufacturers (29.7%), auto, truck & motorcycle parts (18.7%) and air freight & courier services (13.5%). FTXR amassed $1 billion in its asset base and charges 60 bps in annual fees. The average trading volume is moderate at 180,000 shares (read: 10 Sector ETFs Flying Higher on a Recovering Economy).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>