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Short Fedex or Long UPS or Neither?
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<blockquote data-quote="paganpink" data-source="post: 269846" data-attributes="member: 5419"><p>UPS has been the one beating earnings expectations lately and that became even more true when FredEx lowered their earnings outlook this week and their stock plummeted. There are a lot of investors that are loyal to FDX because it had a high rate of return for all those years UPS was not available as an investment option because it was privately held and so they hung with them after UPS's IPO. I believe those institutional and large investors are starting to buy more and more stock in UPS especially since Warren Buffett himself started buying UPS stock a year or two ago. The independent contractor status of the ground drivers at FDX represents a huge liability hanging over their heads since they continue to lose all court cases where the company claims they aren't their employees. It seems a certainty that they will eventually have to admit them as employees which is a huge liability considering the years and years that FDX has not paid payroll taxes, Social Security matching funds, workers compensation, or ANYTHING AT ALL for those people. It is even more a certainty that it WILL happen because it's hard to imagine people working side by side on a loading dock where the pay/benefits difference is so great (and the ground job is actually tougher and has many more stops and packages than the air drivers) without their being an uproar at some point. I know of no business that has ever made that work for long because even those <em><u>with </u></em>the better pay feel sorry for their co-workers and friens working with them. That may be one of the reasons that the Teamsters union has started to win in local votes for representation for the first time in FDX history despite the companies appeals and delays in allowing them in. In addition, the fact that FDX sends out two drivers for every business that has both air and ground pieces is hugely inefficient and costly compared to UPS as shown in the fact that big brown is now clearly beating them in the competition for domestic volume and in spite of the enormous benefit that FDX has in costs by paying billions and billions of dollars less for benefits and pay for its people. Without a new union contract no longer looming over UPS, (and their recent announcement that they will buy back <em>another</em> two billion dollars worth of stock) look for their share prices to soar. Buy UPS- sell FDX.</p></blockquote><p></p>
[QUOTE="paganpink, post: 269846, member: 5419"] UPS has been the one beating earnings expectations lately and that became even more true when FredEx lowered their earnings outlook this week and their stock plummeted. There are a lot of investors that are loyal to FDX because it had a high rate of return for all those years UPS was not available as an investment option because it was privately held and so they hung with them after UPS's IPO. I believe those institutional and large investors are starting to buy more and more stock in UPS especially since Warren Buffett himself started buying UPS stock a year or two ago. The independent contractor status of the ground drivers at FDX represents a huge liability hanging over their heads since they continue to lose all court cases where the company claims they aren't their employees. It seems a certainty that they will eventually have to admit them as employees which is a huge liability considering the years and years that FDX has not paid payroll taxes, Social Security matching funds, workers compensation, or ANYTHING AT ALL for those people. It is even more a certainty that it WILL happen because it's hard to imagine people working side by side on a loading dock where the pay/benefits difference is so great (and the ground job is actually tougher and has many more stops and packages than the air drivers) without their being an uproar at some point. I know of no business that has ever made that work for long because even those [I][U]with [/U][/I]the better pay feel sorry for their co-workers and friens working with them. That may be one of the reasons that the Teamsters union has started to win in local votes for representation for the first time in FDX history despite the companies appeals and delays in allowing them in. In addition, the fact that FDX sends out two drivers for every business that has both air and ground pieces is hugely inefficient and costly compared to UPS as shown in the fact that big brown is now clearly beating them in the competition for domestic volume and in spite of the enormous benefit that FDX has in costs by paying billions and billions of dollars less for benefits and pay for its people. Without a new union contract no longer looming over UPS, (and their recent announcement that they will buy back [I]another[/I] two billion dollars worth of stock) look for their share prices to soar. Buy UPS- sell FDX. [/QUOTE]
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