Last time we talked about Bill Gates, he was neck-deep in making eco-friendly butter to pair with a side of crickets. Why? Who knows… maybe he’s prepping us for when he becomes the world leader and protein powder is illegal. But now, Gates is making headlines for something that actually makes sense. His trust just made a $273 million bet on FedEx, one of the world’s biggest logistics giants.

While FedEx is the main company delivering your Amazon regrets… it’s really a temperature gauge for the global economy. When businesses boom, packages fly. When things slump, well, FedEx feels it in its bottom line. And lately, it’s been a struggle considering the S&P 500 Transportation Index is down 0.5% in 2024, even when the S&P 500 soared 23%.

But interesting enough… FedEx isn’t as bad off as the market thinks. At its current valuation, the stock trades at a price-to-earnings (P/E) ratio of 14.1, compared to the sector average of 19.8. Meaning, it’s significantly cheaper than its peers despite being one of the most critical players in global logistics. FedEx’s own struggles have been no secret. Yet, where most people see a company under pressure, Gates saw a fixer-upper with potential. The Gates Trust bought 1 million shares at $273 apiece, essentially banking on a comeback for the shipping giant… and, by extension, the transportation sector.

While other companies are sitting around pointing fingers in the C-Suite, FedEx is cleaning house with its DRIVE initiative, which aims to cut $2.2 billion in costs by streamlining its operations. One big move under DRIVE is spinning off the FedEx Freight division, which made $9.4 billion last year. By narrowing its focus on core operations, FedEx is setting itself up to outpace competitors like UPS and Amazon. Clearly, while the transportation industry has been in a funk, Gates thinks  it’s undervalued (maybe his BFF Warren Buffett gave him a tip). Let’s connect the dots. With interest rates likely to drop in 2025, businesses will borrow more, manufacturing will rebound, and demand for freight and logistics will rise. FedEx, already a global logistics leader, is primed to capitalize.

And let’s not ignore the e-commerce elephant in the room. Online sales are projected to grow 56% by 2026, and every click-to-cart transaction needs a delivery solution (aka FedEx). If you’re one of the old farts predicting a financial Armageddon, and that we should all buy gold and guns? Clearly, Bill Gates sees a brighter future. He believes the backbone of global commerce is getting ready for a major comeback. And unlike all those doom and gloomer gurus, he’s putting his money where his mouth is.

P.S. In the grand scheme of things, IF Stocks.News premium isn’t for you, you can always go back to trading and investing the same way you are now. The worst you are out is a measly $20 dollars… so why not take the leap and see EXACTLY how 2,000+ premium members are uncovering opportunities most traders never see? It’s a no-brainer. Click here to check out Stocks.News premium today… 

Stock.News has positions in Amazon.