Longleaf Partners, managed by Southeastern Asset Management, released its second-quarter 2026 investor letter for its “Partners Fund”. A copy of the letter can be downloaded here. The letter states that the portfolio holdings are attractive now based on both P/V and P/FCF metrics. However, the Fund returned 3.87% in the quarter, significantly lagging the S&P 500’s 15.20% return and the Russell 1000 Value Index’s 13.87% gain. An underweight in Information Technology (IT) primarily contributed to the underperformance. The market’s preference for overvalued stocks in Industrials and other sectors led to inflated multiples, overshadowing real earnings power. The Firm’s investment approach focuses on median, unweighted multiples, prioritizing growth in free cash flow per share, the potential for multiple expansion, and strategic initiatives. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Longleaf Partners Fund highlighted FedEx Corporation (NYSE:FDX) as a leading contributor. FedEx Corporation (NYSE:FDX) is a US-based company that focuses on transportation, e-commerce, and business services. On July 10, 2026, FedEx Corporation (NYSE:FDX) closed at $314.69 per share. One-month return of FedEx Corporation (NYSE:FDX) was -7.10%, and its shares gained 67.02% over the past 52 weeks. FedEx Corporation (NYSE:FDX) has a market capitalization of $75.09 billion.
Longleaf Partners Fund stated the following regarding FedEx Corporation (NYSE:FDX) in its Q2 2026 investor update:
“FedEx Corporation (NYSE:FDX) – Global logistics company FedEx was a contributor for the quarter. Results continued to support our view that FedEx is becoming a more focused, higher-return business, with prior network investments, cost reductions, and mix improvement showing up in stronger earnings and cash generation. In the fiscal fourth quarter, the core Federal Express (FEC) segment grew revenue 14% and adjusted operating income 13%, helped by strong pricing, better mix, and continued growth in higher-value B2B end markets. Network 2.0 and related transformation initiatives are improving density and lowering the cost to serve, while capital discipline is driving better FCF conversion. Full-year capital spending was only 4% of revenue, the lowest level in FedEx’s history, underscoring the opportunity for the company to convert more of its earnings into cash. During the quarter, FedEx completed the spin-off of FedEx Freight, which simplifies the remaining business while allowing Freight to pursue its own focused less than-truckload strategy. Despite the stock’s appreciation, we still believe the market is not fully recognizing the FCF potential of the core parcel network, the benefits still to come from the ongoing transformation, or the value of FedEx’s retained Freight stake. We did however sell our small holding in FedEx Freight after it traded above our appraisal shortly after it was spun off.”