Fedex Essay

481 Words2 Pages
How do you reconcile the difference in stock performance between FedEx and UPS over two time periods of pre and post 2004 (entry into China)? What expectations do you have for future stock performance? The stock performance between FedEx and UPS changed drastically before and after the entry into China. Both of the company’s prices steadily increased as the talks in China began. Slightly after, FedEx’s share price began increasing at a high rate of five times faster than UPS’s share price. Between 2003 and 2004, FedEx’s share volume had increased by more than 50%. Which in turn, made UPS as a company start to suffer. 2. How does the performance of each company compare to the S&P 500? FedEx had the largest foreign presence in China, which included 11 weekly flights, twice as much as UPS. The performance of FedEx and UPS compared to the S&P 500 was drastic. Both companies exceeded the S&P between the period of October of 2003 and December of 2003, FedEx slightly above UPS. After December of 2003, both companies fell below S&P, and then increasing as the months continued on. FedEx was always above UPS. 3. How does the performance of each 4. How do you explain the variation of EVA relative to the stock value of each firm? (Hint- does stock value track the historical EVA?) Do you think EVA or stock value is misguided? 5. Why did the stock price of FedEx outpace UPS after 2004? What does this say about the two firms entering a new market? Both stock prices for FedEx and UPS rose after 2004 because of the air transportation agreement between China and the US. There was a great deal of market opportunity during this time in China for both companies. FedEx had high stock prices because they had a larger presence in China then UPS did. FedEx was more innovative and catered to more cities in China, also offering more weekly flights then
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