With shares of United Parcel Service (NYSE:UPS) trading around $99, is UPS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let�� analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s MovementUnited Parcel Service is a package delivery company. The company delivers packages each business day for 1.1 million shipping customers to 7.7 million consignees in over 220 countries and territories. Last year, United Parcel Service delivered an average of 16.3 million pieces per day worldwide or a total of 4.1 billion packages. It serves the global market for logistics services, which include transportation, distribution, forwarding, ground, ocean and air freight, brokerage, and financing. United Parcel Service operates in three segments — U.S. Domestic Package, International Package, and Supply Chain & Freight.
United Parcel Service on Friday warned it would miss its fourth quarter earnings targets, blaming an ��nprecedented��rise in online holiday shopping, a shortened holiday season and bad weather despite ��xtraordinary measures��to meet Christmas demand. This will be the second time the Atlanta-based package and delivery concern has missed its quarterly earnings targets.
Best Transportation Stocks To Own For 2015: Knight Transportation Inc (KNX)
Knight Transportation, Inc. (Knight), incorporated on August 31, 1989, is a provider of multiple truckload transportation services, which generally involve the movement of full trailer or container loads of freight from origin to destination for a single customer. The Company is a provider of multiple truckload transportation services with a nationwide network of service centers through which it operates one of the tractor fleets. In addition to its own fleet, the Company also partners with third-party equipment providers to provide truckload capacity and a broad range of solutions to truckload shippers. The Company has five operating segments comprised of three asset-based operating segments: dry van truckload, temperature-controlled truckload and port services and two non-asset-based operating segments brokerage and intermodal services. Through its asset-based and non-asset-based capabilities the Company is able to transport, or can arrange for the transportation of, general commodities for customers throughout the United States and parts of Canada and Mexico.
The Company's asset-based businesses generally include dry van truckload, refrigerated truckload, dedicated truckload, and drayage services. Its non-asset-based services generally include rail intermodal and truckload brokerage services. However, within its asset-based services, the use of independent contractors to provide tractors lowers the capital investment in its dry van and refrigerated operations. In addition, drayage operations generally involve less expensive tractors with longer lives and do not require a investment in trailering equipment. As of December 31, 2012, it operated 3,627 company-owned tractors with an average age of 1.9 years. It also had under contract 507 tractors owned and operated by independent contractors. Its trailer fleet consisted of 9,564 53-foot long trailers with an average age of 5.5 years and includes 1,092 temperature-controlled trailers.
Advisors' Opinion:- [By Sean Williams]
Swift Transportation (NYSE: SWFT ) , for example, delivered a 4% increase in revenue this past quarter in spite of having fewer trucks in service. The company was able to realize better utilization of its existing fleet and actually saw fuel prices fall from the previous year. The results were even more robust for Knight Transportation (NYSE: KNX ) , whose shareholders saw revenue rise by 7% as the company grew from the year-ago quarter for the 14th straight time and delivered growth from each of its business segments.
- [By Victor Nguyen]
A report released Thursday morning, Citigroup analyst Christian Wetherbee upgrades Knight Transportation (NYSE: KNX) to BUY from NEUTRAL, increasing price target from $17 to $22.
5 Best Freight Stocks To Own For 2014: TNT Express NV (TNTE)
TNT Express NV is the Netherlands-based express delivery company. It collects, transports and delivers documents, parcels and freight on a time-certain or day-definite basis. The Company operates worldwide with domestic, regional and intercontinental delivery. It has own operations in more than 60 countries and can deliver to more than 200 countries through own operations, subcontractors and agents. Its customers are international companies, as well as small and medium enterprises. The Company serves industries such as technology, automotive, industrial, healthcare and lifestyle, as well as financial institutions and governments. The Company operates interconnected international air and road networks. The air network consists of a central air hub in Liege, Belgium, and a fleet of more than 50 aircrafts. The road networks are operated in Europe, the Middle East, Asia, Australia and South America. Advisors' Opinion:- [By Inyoung Hwang]
TNT Express NV (TNTE) lost 4.3 percent to 6.33 euros, its lowest price in four months. PostNL NV, the Dutch mail service with operations in the U.K. and Germany, said it will sell about half of its 29.8 percent stake in the Dutch package-delivery company to reduce debt. The 15 percent stake up for sale is valued at about 540 million euros ($738 million), according to data compiled by Bloomberg. PostNL gained 1.8 percent to 4.17 euros.
- [By Robert Wall]
One of the country�� largest employers with more than 150,000 staff, Royal Mail has shifted away from letters to more lucrative package shipping, competing with TNT Express NV (TNTE) of the Netherlands and Deutsche Post AG (DPW)�� DHL Express.
5 Best Freight Stocks To Own For 2014: PostNL NV (PNL)
PostNL NV is a Netherlands-based Company active in delivery sector. The Company is engaged in the delivery of documents, small packages and standard parcels. The Company�� business is organized into three segments: Mail in the Netherlands, responsible for mail services in the Netherland, documents management, direct marketing and fulfillment services, and operating over 2,600 shop-in-shop post offices; Parcels, providing parcel services in the Netherlands and Belgium for both domestic and cross-border parcel distribution, and International, operating in the postal markets of the United Kingdom, Germany and Italy, and focusing on domestic addressed mail services. The Company also provides marketing and communication services, fulfillment solutions and e-commerce related solutions. Advisors' Opinion:- [By Inyoung Hwang]
PostNL (PNL) sank 11 percent to 2.48 euros, the biggest decline since Jan. 14. The Amsterdam-based company said sales in the second-quarter were 1.03 billion euros ($1.37 billion), falling short of the 1.04 billion euros predicted by analysts on average. PostNL forecast addressed mail volume in 2013 will drop as much as 11 percent, greater than its previous forecast of no more than 10 percent.
5 Best Freight Stocks To Own For 2014: Canadian National Railway Co (CNR.TO)
Canadian National Railway Company (CN), incorporated on August 24, 1995, is engaged in the rail and related transportation business. CN�� network of approximately 20,100 route miles spans Canada and mid-America, connecting three coasts: the Atlantic, the Pacific and the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama) and metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth (Minnesota)/Superior (Wisconsin), Green Bay (Wisconsin), Minneapolis/St. Paul, Memphis and Jackson (Mississippi), with connections to all points in North America. CN�� network, and its co-production agreements, routing protocols, marketing alliances and interline agreements, provide CN customers access to all three North American Free Trade Agreement (NAFTA) nations. In March 2012, the Company acquired a locomotive program.
Petroleum and chemicals
The petroleum and chemicals commodity group consists of a range of commodities, including chemicals, sulfur, plastics, petroleum products and liquefied petroleum gas products. The Company�� petroleum and chemicals shipments originate in the Louisiana petrochemical corridor between New Orleans and Baton Rouge; in northern Alberta, and in eastern Canadian regional plants.
Metals and minerals
The metals and minerals commodity group consists primarily of non-ferrous base metals and ores, concentrates, iron ore, steel, construction materials, machinery and dimensional loads. The Company provides rail access to aluminum, mining, steel and iron ore producing regions.
Forest products
The forest products commodity group includes range of lumber, panels, paper, wood pulp and other fibers such as logs, recycled paper, wood chips, and wood pellets. The Company has rail access to the western and eastern Canadian fiber-producing regions. In United States, the Company is located to serve both the Midwest and southern United! States corridors with interline connections to other Class I railroads.
Coal
The coal commodity group consists of thermal grades of bituminous coal, metallurgical coal and petroleum coke. Canadian thermal and metallurgical coal is exported through terminals on the west coast of Canada to offshore markets. In United States, thermal coal is transported from mines served in southern Illinois, or from western United States mines through interchange with other railroads, to utilities in the Midwest and southeast United States, as well as offshore markets through terminals in the Gulf and the Port of Prince Rupert.
Grain and fertilizers
The grain and fertilizers commodity group depends primarily on crops grown and fertilizers processed in western Canada and the United States Midwest. The grain segment consists of three primary segments: food grains (mainly wheat, oats and malting barley), feed grains and feed grain products (including feed barley, feed wheat, peas, corn, ethanol and dried distillers grains), and oilseeds and oilseed nproducts (primarily canola seed, oil and meal, and soybeans).
Intermodal
The intermodal commodity group is consists of two segments: domestic and international. The domestic segment transports consumer products and manufactured goods, operating through both retail and wholesale channels, within domestic Canada, domestic United States., Mexico and transborder, while the international segment handles import and export container traffic, directly serving the ports of Vancouver, Prince Rupert, Montreal, Halifax and New Orleans.
Automotive
The automotive commodity group moves both finished vehicles and parts throughout North America, providing rail access to certain vehicle assembly plants in Canada, and Michigan and Mississippi in the United States. The Company also serves vehicle distribution facilities in Canada and the United States, as well as parts production facilities in Mi! chigan an! d Ontario. The Company serves shippers of import vehicles via the ports of Halifax and Vancouver, and through interchange with other railroads.
The Company competes with Canadian Pacific Railway Company.
Advisors' Opinion:- [By Roadmap2Retire]
I am also considering various stocks that are not currently in my portfolio, but the current high valuations do not provide many options.
Canadian National Railway (CNR.TO) engages in transportation of goods including petroleum and chemicals, grain and fertilizers, coal, metals and minerals, forest products, intermodal, and automotive products. The company operates 20,100 route miles of track that spans Canada adn mid-America connecting the three coasts of Atlantic, Pacific and Gulf of Mexico. CNR is a dividend contender that has been raising its dividends for 17 consecutive years and has a 5-yr DGR of 13.9% and a 10-yr DGR of 17.4%. Norfolk Southern (NSC) engages in rail transportation of raw materials, intermediate and finished goods operating approximately 20,000 router miles across the southern and eastern US. NSC and other railroads stand to benefit from the oil boom in continental US, and before permanent pipelines are put in place, railroads are the only option available to transport the huge supplies. NSC is a dividend contender raising its dividends for 12 consecutive years and has a 5-yr DGR of 10.8% and 10-yr DGR of 21.1%. Procter & Gamble (PG) and Unilever plc (UL) are giants in the consumer packaged goods field. PG has five segments - beauty, grooming, healthcare, fabric care and home care. UL has four segments - personal care, foods, refreshment and home care. PG has been raising dividends for 57 years; has a 5-yr DGR of 10.2% and a 10-yr DGR of 10.8%. UL has been raising dividends for 25 years; has a 5-yr 7.07%. Aerospace & Defense Sector: With the global turmoils continuing and the rise of new conflicts across Eastern Europe and Middle East, I am considering adding some exposure to the Aerospace & Defense Sector. I recently posted an article regarding the current valuation of the stocks in the sector here. Index Funds - China ETF, Emerging Markets - I am considering adding a new index fund to my portfolio to track the Chinese marke
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