United Parcel Services (UPS)

Usually a lot of the transportation companies will end up passing through fuel prices, up or down, to their end customers. Over the longer-term, they seem to have a relatively steady margin. Really likes this company and it is just a matter of finding the right price to buy it at. A good, long term grower. They are the world leader. There is a logistical advantage that they have by being the biggest. A good, steady stock.

A lot of stores that have online services and are talking about the growth rates in that area as being a lot higher. That speaks directly to something like this company. There is certainly a lot of positive momentum.

This probably isn’t the time to be buying one of these companies. They tend to do quite well leading into the period between Thanksgiving and end of the year. That is their big volume time. He would prefer FedEx (FDX-N), which has a little more growth potential and are a little bit more involved in cost-cutting.

Too expensive for him. It's a really good business. Exposed to favourable dynamics, in the US especially if he is right about the US economy improving. This also benefits obviously from lower energy costs. Also, from the ongoing transition to online shopping and delivery.

FedEx (FDX-N) or UPS (UPS-N)? Right now would be a good time to buy either of these as you have the holiday season coming up, which is usually a good time for delivery companies. Fuel is a huge component going forward, and the current correction in fuel costs will be good, so this would be an attractive time. He would probably rank this one over FedEx as he expects it would have a little more upside at this point.

The seasonal period is from October 10th to December 8th. This trade has worked 93% of the time and produced an average return of 8.1% since 2000. You don't want to wait until Christmas to exit; you want to get out before. Right at the peak when the whole delivery system occurs, around December 8^th.

Is underperforming the stock. It is testing its 20 day moving average. Seasonally it is strong from end of October through Christmas. He looks for base building prior to the seasonal period of strength. The technicals are not there now for buying the stock.

An interesting company because it really is a proxy on the economy. It is about 60% domestically based and tends to be more ground than air versus FedEx (FDX-N). What bothers him a little bit is the multiple. It is trading at 19-19.5 times earnings. It just doesn’t seem to have a lot of upside from that standpoint, and some risk that it might fall back to a normalized trend in the 15-16 range.

United Parcel Service (UPS-N) or FedEx (FDX-N)? Both are doing well from a stock side, better than on a fundamental side. This one is more of a ground transport play. FedEx is the air play. FedEx has been more proactive in terms of the management of their business, and are trying to wring out about $1.6 billion annually by the beginning of 2016. For the time being he would pass on both of these as they are a little too expensive on the multiple and valuation side.

Best option. Big competitor is FedEx. UPS is the premier franchise. One network instead of two for FedEx. Less demand for capital. Higher dividend and much better return of capital. FedEx is restructuring. But for consistent return and dividend increase, UPS stands out.

(Top Pick Feb 04’13, Up 21.89%) Came out and said in January that they had trouble with the surge in overnight packaging demand between Thanksgiving and January this year. They recognize the issue and are trying to fix it. They have one network and are not capital intensive. Dividends will continue going forward.

(Market Call Minute) It is very tied to economic growth.

Generally likes shippers. Long-term view is positive in that e-commerce is a developing theme that will continue on and on. Shipping times keep getting less and this company and UPS (UPS-N) will benefit. He would watch fuel prices as this is a headwind that is a big component of shippers. Would look to take advantage of any kind of price weakness on either of these names.

Shopping on line. Play on increasing global freight and the trend for shopping on line. Good at passing capital back to shareholders. Increased dividend for last 10 years except 2008. Another 10% expected this year. Good growth angle. 2.8% yield. Less beta than the S&P 500. Currency issues do affect them.

Doesn’t know this one that well specifically but if you look at what they are in structurally, it should be a company that benefits from an increase in the economy. Made an acquisition of TNT, which was a distressed company so presume they got it at a pretty good price. If you are a believer in the US economy and trade and Internet, then this should be a beneficiary of e-commerce.