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After the closing bell on Dec 17, transport bellwether FedEx (FDX - Free Report) reported stellar fiscal 2021 second-quarter results. The courier company outpaced earnings and revenue estimates.
Earnings per share came in at $4.83, surpassing the Zacks Consensus Estimate of $3.90 and improving from the year-ago earnings of $2.51. Revenues grew 19% year over year to a record $20.6 billion and edged past the estimated $19.3 billion. This is the first time that FedEx has reported sales of more than $20 billion and double the earnings of last year. Robust performances were driven by higher volume growth in FedEx International Priority and U.S. domestic residential package services (read: Why Cyclical Sector ETFs Are Roaring to All-Time Highs).
Despite the robust results, FDX shares dropped almost 4% in after market hours. FedEx has a Rank #3 (Hold) and an impressive VGM Score of A. It currently falls under a top-ranked Zacks industry (top 17%).
ETFs in Focus
The FedEx earnings report has put transport ETFs — 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 #3 (Hold) (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 14.1% of the assets. Within the transportation sector, railroads, and air freight and logistics take the top two spots with 34.6% and 31.3% share, respectively, while trucking (18.2%) and airlines (10.4%) round off the next two. The fund has accumulated $1.5 billion in AUM while it sees a good trading volume of around 214,000 shares a day. It charges 42 bps in fees per year (read: 6 Secret Santa ETFs to Add Cheer to Your Portfolio).
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 AUM of $429 million, FedEx takes accounts for 2.7% 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 28% and 21.5% share, respectively. The fund charges 35 bps in fees per year from investors and trades in an average volume of about 429,000 shares a day.
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 2.2% share in the basket. Here, ground freight & logistics takes the largest share at 33.3%, followed by auto & truck manufacturers (20.5%), auto, truck & motorcycle parts (15.7%), and airlines (14.7%). FTXR has amassed $797.7 million in its asset base and charges 60 bps in annual fees. The average trading volume is moderate at 115,000 shares.
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Transport ETFs in Focus Post FedEx Solid Results
After the closing bell on Dec 17, transport bellwether FedEx (FDX - Free Report) reported stellar fiscal 2021 second-quarter results. The courier company outpaced earnings and revenue estimates.
Earnings per share came in at $4.83, surpassing the Zacks Consensus Estimate of $3.90 and improving from the year-ago earnings of $2.51. Revenues grew 19% year over year to a record $20.6 billion and edged past the estimated $19.3 billion. This is the first time that FedEx has reported sales of more than $20 billion and double the earnings of last year. Robust performances were driven by higher volume growth in FedEx International Priority and U.S. domestic residential package services (read: Why Cyclical Sector ETFs Are Roaring to All-Time Highs).
Despite the robust results, FDX shares dropped almost 4% in after market hours. FedEx has a Rank #3 (Hold) and an impressive VGM Score of A. It currently falls under a top-ranked Zacks industry (top 17%).
ETFs in Focus
The FedEx earnings report has put transport ETFs — 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 #3 (Hold) (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 14.1% of the assets. Within the transportation sector, railroads, and air freight and logistics take the top two spots with 34.6% and 31.3% share, respectively, while trucking (18.2%) and airlines (10.4%) round off the next two. The fund has accumulated $1.5 billion in AUM while it sees a good trading volume of around 214,000 shares a day. It charges 42 bps in fees per year (read: 6 Secret Santa ETFs to Add Cheer to Your Portfolio).
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 AUM of $429 million, FedEx takes accounts for 2.7% 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 28% and 21.5% share, respectively. The fund charges 35 bps in fees per year from investors and trades in an average volume of about 429,000 shares a day.
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 2.2% share in the basket. Here, ground freight & logistics takes the largest share at 33.3%, followed by auto & truck manufacturers (20.5%), auto, truck & motorcycle parts (15.7%), and airlines (14.7%). FTXR has amassed $797.7 million in its asset base and charges 60 bps in annual fees. The average trading volume is moderate at 115,000 shares.
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 >>