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Danya Rahman

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... Brokerage, begins operation as a customs broker in Niagara Falls, N.Y. ... After two years of lobbying led by Federal Express, Congress passes Public Law ... – PowerPoint PPT presentation

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Title: Danya Rahman


1
  • Danya Rahman
  • Hoa Lien
  • Martha Mejia
  • Sara Woodbury
  • Ruchi Shah

2
Background
  • 1913C.J. Tower Sons, forerunner to FedEx Trade
    Networks subsidiary FedEx Trade Networks
    Transport Brokerage, begins operation as a
    customs broker in Niagara Falls, N.Y.
  • 1971Federal Express Corporation is founded in
    Little Rock, Ark by Frederick Smith.
  • 1977After two years of lobbying led by Federal
    Express, Congress passes Public Law 95-163,
    enabling FedEx and other cargo airlines to use
    larger aircraft with no geographic restrictions
    on routes.
  • 1994Federal Express officially adopts "FedEx" as
    its brand for recognition as the worldwide
    standard for fast, reliable service.
  • 2000Parent company FDX is renamed "FedEx
    Corporation." Services are divided into companies
    that operate independently yet compete
    collectively FedEx Express, FedEx Ground, FedEx
    Global Logistics, FedEx Custom Critical and FedEx
    Services

3
Mission Statement
  • FedEx strives to produce superior financial
    returns for shareowners by providing high
    value-added supply chain and transportation
    services.
  • FedEx companies will strive to develop mutually
    rewarding relationships with its employees,
    partners and suppliers.
  • Safety will be the first consideration in all
    operations. All corporate activities will be
    conducted to the highest ethical and professional
    standards.

4
Management
FREDERICK W. SMITH
T. MICHAEL GLENN
ALAN B. GRAF, JR
President, Chief Executive Officer, FedEx Servi
ces Salary 2,059,787 Total Shares
199,872              

Executive Vice President, Chief Financial Office
r Salary 2,104,530 Total Shares
183,590            
Chairman, President, Chief Executive Officer
Salary 4,244,242 Total Shares 15,269
,791              

of Shares Held by All Insider and 5 Owners 8
5
FedEx Aircrafts
6
FedEx Freights
A group of new FL 70 City units
with air ride seats,cabs,
and suspensions
R4179 With FedEx Logo'ed trailers.
Photo of rebranded AF equipment,
now FedEx Freight
When FedEx bought Caliber Systems,
one of the companies acquired was Roberts
Express. FedEx changed the name to FedEx Custom
Critical. This photo was taken at FedEx Freight
( formerly American Freightways
and Viking Freight) customer center at Charlotte,
N.C.
7
Competitors Chart
  • FedExs has four major competitors in the air
    courier industry, two of which are not publicly
    traded in the NYSE- DHL and USPS.

8
  • Average Daily Volume - More than 3.2
    million packages daily
  • Workforce - More than 138,000 employees
    worldwide
  • Service Area - More than 220 countries and
    territories, including every address in the
    United States
  • Recent Awards - Air Cargo World "World's Top 50
    Cargo Airlines" list, No. 1 (2004)

9
  • Workforce - More than 25,000 employees
  • Average Daily Shipments - More than 64,000
    shipments daily
  • Service Area - Full-state coverage throughout the
    United States (including Alaska and Hawaii)
    international service for Canada, Mexico, Puerto
    Rico, Central and South America, the Caribbean,
    Europe and Asia
  • Recent Awards - American Trucking Association,
    National Truck Driving Championship FedEx
    Freight driver Wayne Crowder won the National
    Grand Champion and National Rookie of the Year
    (2004) first place in the 3-Axle class and
    5-axle class categories (2004).

10
  • Workforce - More than 53,000 employees and
    independent contractors
  • Average Daily Volume - More than 2.6
    million packages daily
  • Recent Awards - American Trucking Association
    President's Trophy for best overall safety
    program (1996, 2000, 2004)

11
  • Workforce -More than 20,000 employees worldwide
  • Service Area-Service in 11 countries
  • Recent Awards -Information Week "Information
    Week 500" list for top information technology
    innovators (2001-2004)

12
  • Average Daily Volume -Approximately 700 shipments

  • Service Area - Service throughout the United
    States and Canada, and within Europe
  • Workforce - More than 2,000 employees and
    contractors
  • Recent Awards -Logistics Management Quest for
    Quality Award, Expedited Motor Carriers category
    (2004)

13
Segment Revenue Chart
14
FedEx Corporation Key Ratio Analysis
Strength in Growth Rate Percentage
15
Price Ratios
FAIR in Price Ratio
16
Profit Margin Ratios
Fair Profit Margin
17
Financial Condition
Fair financial condition
18
Investment Returns
Good Investment Returns
19
Management Efficiency
FAIR management efficiency
20
Holding Period Return
21
FedEx Ratios Conclusion
  • Based on FedEx ratios, overall, we conclude that
    this company has Strength!!

22
Trading Analysis
  • Current Price 85.61
  • Trading Volume 2,375,800
  • Market Capitalization 25.86 Billion

23
Market Efficiency
Company Specific News This reaction takes no
form of market efficiency
24
Market Efficiency
Non Company Specific News Fed raises interest
rates. FedEx reaction weak form.
25
Capital Structure
26
Risk Analysis
The company is currently underpriced because
ke(DCF Model) ke(CAPM Model) 0.44 0.0321.

27
Cost of Capital
FedEx has negative figures for Ke in DCF and
CAPM. We used constant growth rate model to calcu
late the Ke in WACC.
28
5-Year Price Chart
29
Strengths and Weaknesses
  • Strengths
  • Based on required return comparison between the
    DCF model and CAPM model, it appears that the
    stock is underpriced at 98.19. This is a strong
    indication that they will meet their mean value
    estimation of 105.77.
  • The capital market structure is stable. Also the
    WACC is low. The holding period return has
    increased steadily from 2003 to 2004.
  • Weaknesses
  • FedEx price to earnings ratios seem relatively
    low, but this below average ratio can be owing to
    the companys abnormally large earnings per
    share.
  • FedEx has a debt/equity ratio a bit higher than
    of the industry.

30
Buy or Sell?
All things considered, we, as a group, recommend
that stockholders of this company the option of
BUY/HOLD, as do the revered financial analysts.
31
FedEx Beyond Package Delivery
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