Analysts Discuss Rumor Ackman is Investing in FedEx, Offer Several Possibilities

Analysts covering FedEx FDX are speculating just as much as the average investor following a rumor that Bill Ackman is investing in the company. The rumor has shares of FedEx up more than 6 percent Tuesday afternoon.

In a letter to Pershing Square investors on Monday, Ackman made it known he is investing in a "large cap US company," but, unfortunately for investors, Ackman offered no further details.

When asked if the movement in FedEx’s stock Tuesday was caused by the rampant speculation surrounding Ackman’s potential investment, Jack Atkins of Stephens Wealth Management stated, “That’s what [the stock’s movement] is being attributed to by most people today. FedEx did have some constructive industry data come out on Monday that showed North American export volumes from Asia to America up 14%, but I don’t think the stock would move today like it has based off yesterday’s news.”

Atkins went on to elaborate on what could make FedEx a potentially attractive investment for Ackman: “It’s no secret that FedEx is in the process of implementing a positive cost-improvement plan, and perhaps Ackman sees the plan as presenting additional margin enhancement, and more returns to shareholders...FedEx is positioned to deliver on a strong earnings road in an overall tepid world economy.”

David Campbell of Thompson Davis & Co. was not ready to attribute the stock’s positive movement to the rumor. When asked what made FedEx a conceivably attractive investment, Campbell said Ackman “...might be interested in FedEx for a speculative position due to the fact the company might break up into several smaller companies in the future.” Campbell did, however, echo the sentiment he likes FedEx as a company due to its position in the market moving forward.

FedEx shares last traded at $103.46.