Why Lee Munson 'wouldn't touch' FedEx stock

Let's start with FedEx, which reported a surprise B last quarter, but Morgan Stanley is still bearish for its part, expecting a miss in Express and freight as volumes drop after the holiday quarter and the company continues to cut costly. What would you do here? You know, I, I wouldn't touch this thing. You know, so many value investors last year lost money on this thing. Here's my issue with it. The Express, what we think of is like regular FedEx, it's just not growing. It just doesn't have have the growth. A lot of the growth is about a little less than 40%, which is, you know, FedEx Ground. Here's my problem. All management can do is talk about how they've, they've done all this big cap EPS. They got a young fleet in terms of their, their airlines and all this stuff. But at the end of the day, until they harmonize the experience of Ground and what we call Express, I think it's a no go zone. I don't like the service. I I just don't think it works. All right. We'll move along then. I'll see if FedEx can beat those low expectations, but we'll talk General Mills then, which is up 4% this year with Piper Sandler projecting an increase in promotions. We were talking about this and a broader retail slowdown, but still expecting the pet category to help General Mills. What is the what do you do with this one, Lee? You know, usually if I just want to buy value stocks, which I I'm akin to, I'll just buy the Russell, you know, 1000, buy an ETF. I actually like General Mills and I know it's not my type of fast grow. And it's kind of like the old Lee why I liked, you know, widow and orphans. If you need a widow and orphan stock yielding almost 3 1/2 percent, I like this. I'm not concerned about the slowdown because I think people will be trading down. I want to eat cereal at home. I think that behavior is there. So I think if we have a slowdown in the economy, it'll be a nice safe play. But I'll tell you, the pet food makes it hot. You got to analysts, they're all like excited about pet food. It's kind of a buzzy thing in analysts land. So if you're looking for a widow in orbit stock, I like this. And and it's a cheaper PE than the broader value index. I look at it and wonder if we're just getting a message from General Mills, Pepsi, Mondelez that there's more consumer disinflation or deflation to come. And even the pet category is competitive. Look at the rise of fresh pet. People sometimes are just, they're looking if they're going to pay, they want to pay for the really good stuff. Yeah, totally agree with that. I think that we're going to see I, I don't think that we see in the numbers the disinflation of a lot of just basic consumer products yet. I think people are in disbelief that the that price pressure is going to be relieved. Yeah. All right, let's move along to Paychecksley, which also is about to report they're actually on pays for their 5th positive month in six. Feels like a good sign for the economy. RBC expects professional services demand to offset losses from the wind down of the employee retention tax credit. That's an interesting angle there. They also see opportunity in pricing. Do you like paychecks? Do you have to worry about a slowing labor market or is the stock kind of immune from all of that? I don't think the stock's immune for it. I, you know, I, I understand the long term story. I mean, paycheck has just been payola for people who own it for a long time have been patient. Here's what my problem is. They're, they're not even, I mean we're not even going to get to see 5% growth. I mean, we have a stock that's under 876 percent growth. It's not at a big discount in terms of valuation and it's not that people don't want to hire out there. When you listen to management talk, they're saying we just can't find people to hire. So I don't really know where that organic growth engines going to be at. At best, what's it going to be flat? At worst we a little softness in labor markets, lower volumes. I'm just not into this. I'd rather buy an index fund than paychecks.