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FDX vs. UPS
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<blockquote data-quote="clueless" data-source="post: 647173" data-attributes="member: 15572"><p>The P/E ratio you referenced is known as a 'relative valuation' and you're absolutely correct--this type of value is far more telling of a company's valuation relative to another company than the absolute stock prices. The P/E and similar ratios tell an investor how many dollars 'the market' is willing to pay for, say, a dollar of the company's earnings, its sales, its free cash flow, etc. It should be noted that these ratios are 'double-edged swords'. While a high relative valuation indicates that investors are more highly valuing a particular company's assets, earnings, sales, etc., it also can indicate that the stock is 'overvalued'. </p><p></p><p>This is how UPS fares relative to FDX.</p><p></p><p>P/E Ratio (TTM)--Yahoo--UPS 'more expensive/higher valued'</p><p>UPS 35.22</p><p>FDX N/A (note: ttm earnings negative)</p><p></p><p>12 Month Normalized P/E Ratio--Forbes--UPS 'more expensive/higher valued'</p><p>UPS 34.9</p><p>FDX 24.7</p><p> </p><p>PEG (5 yr expected)--Yahoo-- FDX 'more expensive/higher valued'</p><p>UPS 3.37</p><p>FDX 4.36 </p><p> </p><p>Price to Sales (TTM)--Reuters-- UPS 'more expensive/higher valued'</p><p>UPS 1.26</p><p>FDX 0.82 </p><p></p><p>Price to Book (MRQ) --Reuters-- UPS 'more expensive/higher valued'</p><p>UPS 8.23</p><p>FDX 2.00</p><p></p><p>Price/Tangible Book Ratio--Forbes--UPS 'more expensive/higher valued'</p><p>UPS 13.17</p><p>FDX 2.38</p><p></p><p>Price/Cash Flow Ratio--Forbes--UPS 'more expensive/higher valued'</p><p>UPS 16.9</p><p>FDX 14.7</p><p></p><p>Price/Free Cash Flow Ratio--Forbes--FDX 'more expensive/higher valued'</p><p>UPS 25.6</p><p>FDX 249.8</p><p></p><p>However, I think the OP is referencing the run in the stock prices during the last year. Using the Forbes data-- UPS' current price is 'only' 52% above its 52-week low of $37.99 whereas FDX's current price is 160% above its 52-week low of $34.02. I believe that's where the concern is. As for me, as an individual investor, while I am concerned as to exactly <em>why </em>the market is reluctant to push UPS' stock to higher levels, the current stock price indicates there is more 'room to run'-IOW this level<em> might </em>be a 'buying opportunity.'</p></blockquote><p></p>
[QUOTE="clueless, post: 647173, member: 15572"] The P/E ratio you referenced is known as a 'relative valuation' and you're absolutely correct--this type of value is far more telling of a company's valuation relative to another company than the absolute stock prices. The P/E and similar ratios tell an investor how many dollars 'the market' is willing to pay for, say, a dollar of the company's earnings, its sales, its free cash flow, etc. It should be noted that these ratios are 'double-edged swords'. While a high relative valuation indicates that investors are more highly valuing a particular company's assets, earnings, sales, etc., it also can indicate that the stock is 'overvalued'. This is how UPS fares relative to FDX. P/E Ratio (TTM)--Yahoo--UPS 'more expensive/higher valued' UPS 35.22 FDX N/A (note: ttm earnings negative) 12 Month Normalized P/E Ratio--Forbes--UPS 'more expensive/higher valued' UPS 34.9 FDX 24.7 PEG (5 yr expected)--Yahoo-- FDX 'more expensive/higher valued' UPS 3.37 FDX 4.36 Price to Sales (TTM)--Reuters-- UPS 'more expensive/higher valued' UPS 1.26 FDX 0.82 Price to Book (MRQ) --Reuters-- UPS 'more expensive/higher valued' UPS 8.23 FDX 2.00 Price/Tangible Book Ratio--Forbes--UPS 'more expensive/higher valued' UPS 13.17 FDX 2.38 Price/Cash Flow Ratio--Forbes--UPS 'more expensive/higher valued' UPS 16.9 FDX 14.7 Price/Free Cash Flow Ratio--Forbes--FDX 'more expensive/higher valued' UPS 25.6 FDX 249.8 However, I think the OP is referencing the run in the stock prices during the last year. Using the Forbes data-- UPS' current price is 'only' 52% above its 52-week low of $37.99 whereas FDX's current price is 160% above its 52-week low of $34.02. I believe that's where the concern is. As for me, as an individual investor, while I am concerned as to exactly [I]why [/I]the market is reluctant to push UPS' stock to higher levels, the current stock price indicates there is more 'room to run'-IOW this level[I] might [/I]be a 'buying opportunity.' [/QUOTE]
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