Short Fedex or Long UPS or Neither?

Looking at the UPS/FDX comparison - what's my best move? Click the following link to see the chart.

http://finance.yahoo.com/q/bc?s=UPS&...&z=m&q=l&c=fdx

[rod]

bury your money in cans in the back yard. Much safer

[toeknee2gx]

Originally Posted by rod

bury your money in cans in the back yard. Much safer

with the US dollar going to the trash can right now?? nope...buy some gold or silver, then bury it in the back yard...

[toeknee2gx]

Originally Posted by TransportStockWatcher

Looking at the UPS/FDX comparison - what's my best move? Click the following link to see the chart.

http://finance.yahoo.com/q/bc?s=UPS&...&z=m&q=l&c=fdx

im not a chart guy for the most part but judging from just the RSI, fdx might be under bought right now...

shorting FDX in the short term could be a good deal because of the recent news but they do that all of the time. They always say that their earnings outlook is not as good as first thought, then they surprise the street when everyone forgets. I do think that rising fuel costs and many many other factors will hit both companies hard with oil near $100. If I was an investor, neither would be an attractive buy for me right now. But if you're already holding, keep holding.

[paganpink]

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 with 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 another two billion dollars worth of stock) look for their share prices to soar. Buy UPS- sell FDX.

[brazenbrown]

Just out today from the Motley Fool.

UPS HANGS TOUGH

[livinitup]

I agree with ToeKnee gold is not only a hedge against inflation but, it is also universal accepted world wide.

[Golfnut54481]

Austrailian Iron ore.....China's hurting

[mathematics]

why would you short a stock that is falling? plus, you need a margin acount to do that sort of thing. if you have a margin account, i don't think you would be asking financial advice on here.

[toeknee2gx]

Originally Posted by mathematics

why would you short a stock that is falling? plus, you need a margin acount to do that sort of thing. if you have a margin account, i don't think you would be asking financial advice on here.

ummm isnt that whole point of shorting it??

and a margin account is that hard to open. All you need is decent credit and 2k with my bank...

[mathematics]

Originally Posted by toeknee2gx

ummm isnt that whole point of shorting it??

and a margin account is that hard to open. All you need is decent credit and 2k with my bank...

the whole point of shorting is to sell BEFORE the drop, not after or during it. plus, what interest are you paying, like 9%? good luck making a profit if you do that.

[happy harry]

Originally Posted by TransportStockWatcher

Looking at the UPS/FDX comparison - what's my best move? Click the following link to see the chart.

http://finance.yahoo.com/q/bc?s=UPS&...&z=m&q=l&c=fdx

First of all realgood business decision coming onto a UPS board and asking if you should buy or sell UPS for fed ex.lol I will tell you what the shares i have had for the past 3 years have all done well around Peak.(obvious) So i wouldn't drop any UPS stock until after Janurary at least. Another side note fyi. I have never lost money on UPS stock since i owned it long term. Just a fool's advice.Good luck

[toeknee2gx]

Originally Posted by mathematics

the whole point of shorting is to sell BEFORE the drop, not after or during it. plus, what interest are you paying, like 9%? good luck making a profit if you do that.

Is that why millions of people are making profits on their short positions?? Just because YOU don't like the math, work, and risk involved doesn't mean its not worth it.

And btw, I don't care to short anything...Just aint my cup of tea. But I don't knock traders out there making money doing it.

Originally Posted by paganpink

. . .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 . . . 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 another two billion dollars worth of stock) look for their share prices to soar. Buy UPS- sell FDX.

__________
Institutional investors are not following Warren Buffet. In reference to the stock comparisons, the best bet is to learn how to read a balance sheet. Say away from long and short and buyback gossip, and concentrate on hard reportable data regulated by law. This is the only way to hold the company accountable.

As for Fedex sending out two drivers, compared to UPS sending out one driver. One of the big differences in such strategies is that UPS has one driver, one revenue stream (per route) and one expense, while FedEx has two drivers, two revenue streams (routes) and one expense. Don't forget, the FedEx ground driver is "independent" and picks up a good part of the operational expenses.

When the local fedx ground guy went on vacation last year, his replacements (people that work for the Indy contractor not FedEx proper) did not pick up for three days. So much for reliability.

UPS has always had significantly more domestic ground business than FedEx. Domestic ground is the bread and butter / cornerstone of UPS. As a matter of fact, the company knows it is too heavily weighted in domestic ground and that is one of the reasons for trying to expand the company into the category of an integrator. The question is, what rate of growth has the FedEx ground sector experienced since their ground service was started and its projections for future growth? Their ground service is steadily growing last time I saw research.

If you review the FedEx annuals for the past couple of years, you can see they report a cumulative growth that is greater than the S&P500 and the Dow Jones Transportation Average. Naturally, it will take an earthquake in Memphis to upset fedex investors.

[mathematics]

Originally Posted by toeknee2gx

Is that why millions of people are making profits on their short positions?? Just because YOU don't like the math, work, and risk involved doesn't mean its not worth it.

And btw, I don't care to short anything...Just aint my cup of tea. But I don't knock traders out there making money doing it.

what math? short selling isn't mathematically rigorous. it's quite easy to short sell.

[toeknee2gx]

Originally Posted by mathematics

what math? short selling isn't mathematically rigorous. it's quite easy to short sell.

*see post #11

my reference to math had nothing to do with difficulty. I was trying to say that YOU didnt like the end result thats all..

[mathematics]

Originally Posted by toeknee2gx

*see post #11

my reference to math had nothing to do with difficulty. I was trying to say that YOU didnt like the end result thats all..

shorting stocks as they are dropping is not smart. end of story.

Originally Posted by TransportStockWatcher

Looking at the UPS/FDX comparison - what's my best move? Click the following link to see the chart.

http://finance.yahoo.com/q/bc?s=UPS&...&z=m&q=l&c=fdx

Remember, if you convert your cash into silver? and gold, then bury it in your backyard, you will starve. If you are holding stock, you have little utility until you convert it. All the talk about how good the stock has been is of little value if the advantage was not taken.

Interesting ups and fedx stock behavior during the past week especially after the fedx earnings statement.

[FAVREFAN]

Originally Posted by paganpink

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 with 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 another two billion dollars worth of stock) look for their share prices to soar. Buy UPS- sell FDX.

Great post paganpink. Plenty of good knowledge here Transportstockwatcher, although I dissagree with the ground volume growth. FDX is kicking our butt on new domestic ground volume growth. I would consider both stocks a hold right now. Much truth in Paganpinks post. Many negatives going forward for FDX. UPS has a higher p/e (19 vs 15) but has a better div. (2.3% vs .4%) I'm a 15 year invester and have held a position in U.P.S. since around '97.(pre-public) I have been unloading shares on spikes over the last few years. We are a safety play. Too big to be anything else. Just look at the price in Nov. '99 when we went public. We've gone nowhere in 8 years. One thing I have learned is to live and die with my own choices. Don't make a choice because of what an analyst says. They are all full of b.s. Do your own research. Great to feel out other shareholders in forums like this just to get a flavor of current opinion though. Good luck!