FedEx Corporation (FDX) Fell in Q1 due to Macro Headwinds

Longleaf Partners, managed by Southeastern Asset Management, released its “Partners Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned -5.14% in the first quarter, compared to the S&P 500’s -4.27% return and Russell 1000 Value’s 2.14% return. The firm’s stock price performance was volatile, but its confidence in future returns grew as the quarter progressed. The firm invested in quality companies that it thinks are strong and resilient to difficult circumstances. The portfolio has significantly outperformed the index, demonstrating this resiliency since the market peak on February 19^th. The rise of its underlying value per share outpaced the performance of the stock price during the quarter. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its first-quarter 2025 investor letter, Longleaf Partners Fund highlighted stocks such as FedEx Corporation (NYSE:FDX). Founded in 1971, FedEx Corporation (NYSE:FDX) offers transportation, e-commerce, and business services. The one-month return of FedEx Corporation (NYSE:FDX) was -15.70%, and its shares lost 21.19% of their value over the last 52 weeks. On April 17, 2025, FedEx Corporation (NYSE:FDX) stock closed at $207.55 per share with a market capitalization of $49.729 billion.

Longleaf Partners Fund stated the following regarding FedEx Corporation (NYSE:FDX) in its Q1 2025 investor letter:

"FedEx Corporation (NYSE:FDX) – Global logistics company FedEx was a detractor for the quarter. The company faced macro headwinds, including tariff threats and ongoing demand weakness in the US. The company is growing market share and margins in its formerly challenged European business, and this was a driver for the Express business to report low-single-digit topline growth that turned into double-digit cash flow growth. The Freight business saw a decline like its peers who are also wrestling with weak industrial conditions. FedEx remains on track to separate into two entities: Express and Freight. This split should provide both companies with greater financial flexibility and accountability, allowing them to be run more efficiently. The market has consistently undervalued FedEx's Freight operations, and a large discount to UPS is no longer warranted for the Express business. Tariff headwinds will be challenging to navigate, but we are glad the company is more on offense now than it has been in previous downturns."

FedEx Corporation (NYSE:FDX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 66 hedge fund portfolios held FedEx Corporation (NYSE:FDX) at the end of the fourth quarter which was 55 in the previous quarter. While we acknowledge the potential of FedEx Corporation (NYSE:FDX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered FedEx Corporation (NYSE:FDX) and shared the list of stocks Jim Cramer recently talked about. In addition, please check out our hedge fund investor letters Q1 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.