United Parcel Service Inc (UPS) – Buy

I initiated a new position today in United Parcel Service Inc (UPS) at $89.4414.

UPS is a company I’ve wanted to buy into for some time now. Heavenly reminded me of this idea to me recently. Ideally, I like to own pieces of companies that I use directly and a lot and UPS is one of them. UPS and USPS are used the most for our sales through the retail websites we own such as JL Ryan and Wondermugs. Most of our larger items ship by UPS and all of our inventory shipments for Amazon FBA ship by UPS. This continues to grow over time. I feel that UPS will continue to benefit from the continued growth in e-commerce. Their rates, service level and convenient drop off locations continue to be better than Fedex.

They have a wide moat with a network that would be hard to duplicate. Amazon could be a threat in this area for a portion of the overall market, but I feel they will be able to defend well against that threat.

The recent pullback in the market due to Coronavirus fears is unwarranted as I suspect that if anything it should help them if more people stay home and just shop online.

The financials look good:

  • Price/Sales: 1.06
  • Price/Forward Earnings: 11.42
  • PEG: 1.29
  • Earnings Yield: 5.66%
  • Forward Dividend Yield: 4.48%

I started with a relative small positions and may add more. There are lot of companies I’m currently looking at buying into. I need to decided if I wish to add more to UPS or add/start positions in others.

I will post shortly with a list of companies I’m looking at right now. Many great opportunities here.