Crisis could lead to an opportunity for shares of FedEx (FDX).
After gapping from about $200 to $161.02 on a sales cut, a warning of a global recession, and several analyst downgrades, the stock is oversold at double bottom support dating back to July 2020. It’s also oversold on RSI, MACD, and Williams’ %R. With patience, we’d like to see FDX refill that bearish gap around $200 a share once the chaos and fear start to fade.
What we like most about FDX right now is that it’s one of the most hated stocks on the Street.
The same fear that would attract well-known investors like Warren Buffett, Sir John Templeton and Baron Rothschild.
Let’s start with Sir John Templeton. In 1939, Europe was just about decimated. So, Templeton bought every European stock trading below $1.00 a share and made a fortune. In fact, he bought shares in 104 companies for about $10,400. He would make a fortune.
He taught us to buy excessive pessimism.
Warren Buffett advises that a “climate of fear is your friend when investing; a euphoric world is your enemy.” And of course, we all remember his advice to “be fearful when others are greedy and greedy when others are fearful.”
Baron Rothschild once told investors, “The time to buy is when there’s blood in the streets, even if the blood is your own.” He knew that very well, considering he made a small fortune buying the panic that followed the Battle of Waterloo against Napoleon.
With elevated fear in FDX, crisis may soon lead to opportunity.