What Makes FedEx (FDX) an Investment Choice?

Diamond Hill Capital, an investment management company, released its “Large Cap Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Markets continued their YTD rally in the third quarter of 2025, with the Russell 3000 Index gaining 8%, bringing the calendar-year returns to over 14%. The portfolio declined and underperformed the Russell 1000 Value Index in the quarter.  In addition, you can check the top 5 holdings of the fund to know its best picks in 2025.

In its third-quarter 2025 investor letter, Diamond Hill Large Cap Fund highlighted stocks such as FedEx Corporation (NYSE:FDX). Founded in 1971, FedEx Corporation (NYSE:FDX) provides transportation, e-commerce, and business services.  The one-month return of FedEx Corporation (NYSE:FDX) was 8.06%, and its shares lost 9.57% of their value over the last 52 weeks. On November 5, 2025, FedEx Corporation (NYSE:FDX) stock closed at $256.10 per share, with a market capitalization of $60.428 billion.

Diamond Hill Large Cap Fund stated the following regarding FedEx Corporation (NYSE:FDX) in its third quarter 2025 investor letter:

"Though markets have continued rising throughout the year, we have still found individual companies whose prices we believe are not reflective of their long-term growth outlooks. Accordingly, we initiated four new positions in Q3, including FedEx Corporation (NYSE:FDX), Thermo Fisher Scientific, Zoetis and Equitable Holdings.

Transportation, e-commerce and business services company FedEx has materially cut its structural costs and has plans for further cuts — which we think could result in a more efficient and profitable parcel business as volumes recover in the period ahead. The company’s LTL (less-than truckload) business is the industry’s largest by revenue and has the second-highest margins — and FedEx plans to spin it off in June 2026, which will subsequently give us exposure to a high-quality business positioned for growth as industrial production improves. FedEx shares have been pressured recently amid an extended freight recession — we capitalized on the opportunity to initiate a position in a high quality business with an attractive long-term growth outlook at a compelling discount to its intrinsic value."

FedEx Corporation (NYSE:FDX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 67 hedge fund portfolios held FedEx Corporation (NYSE:FDX) at the end of the second quarter, up from 62 in the previous quarter. In the first quarter of 2026, FedEx Corporation’s (NYSE:FDX) revenue increased by 3% year-over-year, driven by strength in its U.S. domestic package services. While we acknowledge the potential of FedEx Corporation (NYSE:FDX) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered FedEx Corporation (NYSE:FDX) and shared top stock picks from Bill Gates’s stock portfolio. In Q3 2025, Longleaf Partners Fund shared its insights on FedEx Corporation (NYSE:FDX). In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.