What happened

FedEx (NYSE:FDX) has delivered for investors in 2020, and the company kept on trucking in November. Its shares gained 10.4% for the month, according to data provided by S&P Global Market Intelligence, as excitement built toward what could be a holiday season for the record books.

So what

Last year was miserable for FedEx shareholders. The stock underperformed the S&P 500 by more than 30 percentage points in 2019 due to macroeconomic issues and higher expenses as FedEx invested in building out its infrastructure. But those investments are paying off, and the shares have nearly doubled thus far in 2020.

A FedEx plane awaiting takeoff.

Image source: FedEx.

The company has been a beneficiary of the pandemic-driven growth in e-commerce, and FedEx Chief Marketing Officer Brie Carere in September predicted the holiday season would be "a peak like no other." FedEx is hiring 70,000 people and expanding sorting facilities to try to deal with the expected surge, and the high demand for shipping services is giving transportation companies considerable pricing power this season.

All signs are pointing toward a blockbuster holiday quarter, and the shares continue to drift higher as a result.

Now what

FedEx shares have come a long way this year, but this rally is not over yet. The package delivery giant's free cash flow is just beginning to ramp up after its period of investment in facilities, and initial commentary from trucking companies indicates that the pricing power they are enjoying this holiday season will continue into 2021.

And even after its share price climb, FedEx stock still looks like a good deal. The company today trades at about 18 times expected earnings, which is a discount to archrival United Parcel Services' forward price-to-earnings ratio of 22.

This transport stock is not running out of gas any time soon.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.