We've lost about 18% on the stock price this year.
The domestic market is going to be a turf war from here on out. DHL is not going to stink forever. Look at RPS. We laughed at them in the beginning......
Until ground becomes less of the "golden egg" we are going to be hammered by the market when we post anemic gains in our ground share. Maybe Menlo, Fritz, and Overnite were not bad purchases after all........
Like it or not an older package car company does not excite stockbrokers/holders. People want to put thier money where they think it will triple in 1 year, for one. So the newer, smaller companies with good ideas/products are the over preformers. The established companies are seen as having reached thier peaks long ago and have liitle room to grow. Take Google, stock price X number of shares = 85 billion $ today. How old is google? If you want to make big money in the stock market it won't be with UPS.
Over the same period FedEx fell as well as the broader markets so the drop wasn't specific to UPS only. We didn't help ourself mind you but like Fedex we were victims of dynamics beyond our control.
As for FedEx and DHL I think OK2BC covered it all.
Operating profit from UPS's international segment climbed 41 percent to $397 million, as sales rose 23 percent to $2 billion. The company carried 40 percent more shipments from Asia and 17 percent more from Europe.
FedEx, the No. 2 package-shipping company, said on June 23 that its profit growth was slowing, in part because competition with UPS was holding down rates.
``It appears UPS has reversed a nasty negative trend in ground volume to a positive trend,'' Broughton said. ``It's not surprising that the volume has turned, since they are using price as a weapon.''
The company's U.S. shipments by truck and rail rose 3.3 percent, the most since the third quarter of 2004. U.S. shipments at FedEx Ground rose 9 percent in its quarter that ended May 31.
UPS's yield, or revenue per package, increased an average 2.4 percent for all U.S. shipments and 4.7 percent for international shipments.
Operating profit at U.S. package operations rose 13 percent to $1.12 billion as sales increased 5.7 percent to $6.94 billion.
``UPS has reacted to disappointing results in recent quarters'' with cost controls and improved productivity, said Jon Langenfeld, an analyst at Robert W. Baird & Co. in Milwaukee who rates the company an ``outperform.''
United Parcel Service "outperform," estimates raised
Monday, August 22, 2005 5:33:15 AM ET
Robert W. Baird
NEW YORK, August 22 - Analysts at Robert W Baird maintain
their "outperform" rating on United Parcel Service (UPS.NYS), while raising
their estimates for the company. The target price is set to $87.
In a research note published this morning, the analysts mention that the
company is expected to witness margin growth of 100-200 bps in the domestic
segment during the forthcoming few years. United Parcel Service is expected to
sustain its share of the domestic market and increase its share of the
international markets, which would enable the company to witness 10%-15% EPS growth in the
foreseeable future, Robert W Baird adds. The EPS estimates for 2005 and 2006
have been raised from $3.47 to $3.48 and from $3.89 to $3.93 respectively.
I was rather surprised to see this rise in performance expectations. I do believe the volume, etc. is there to do it but one of the biggests threats to that is fuel costs. Many believe fuel costs will moderate over the coming months and some brave souls are even predicting a price slide back to $2 per gallon or even less. I hope they are right but my saner side sez no way!
I'd just be a little cautious on such a rosey outlook the next 12 months. UPS may very well look as though it will do it but to many outside factors could weigh in and spoil the party.
The largest danger is to share price from expectations.
If for whatever reason the expectations are a lousy penny less (even from great expectations, meaning huge profit increase) and the market acts like the company is going out of business and dumps the stock causing the share price to drop.
Totally stupid and emotional, but the way of the market.
wkmac: I'm hopeful about a slight decline of oil prices. September is the end of vacation times and I'm hoping demand for oil will lessen. Prices will lower when demand lessens. I'm keeping my fingers crossed.
For the stock value, keep in mind it is a dividend paying stock. Since going public in 1999 UPS has paid 1999 I think only .17 because it IPO'ed late in the year); 2000 .17 per quarter or .68; 2001 & 2002 .19 per quarter or .76; 2003 Q1, Q2= .21 Q3, Q4 = .25 or .92 for year; 2004 .28 per quarter or $1.12 and so far in 2005, Q1 Q2 Q3, the dividend is at .33 totaling .99 (est to be $1.32) Total to date $4.47 payed to shareholders per share. The dividend is more important because if you REINVEST you are now buying dividend paying shares with their money. Your number of shares is increasing allowing your dividend to buy more shares. The guys at the top are not stupid, greedy maybe, but not stupid. The make a boatload of money with every dividend payed! Look at insider trading info on a stock website (I use morningstar.com) and you will see eskew and the rest of the board hold 100's of thousands of shares. They have way more to loose than anyone at this level. Not till they all dump their stock do I feel we need to worry.
Not that I see the company going under or the stock price plummetting the fact we don't have to worry until insiders start massive selling leaves no piece of mind as we would only hear about that after the fact too late as always.
up 1.13 right now.
We are catching a nice updraft. The market isn't very hot today, maybe Scott Davis is using some of the 2 Bil to buy back, or the upgrade is finally getting widespread attention. Whatever, these are the days we wait for.
Especially after the deadline has passed for the dividend payout date.
Now we need some back to back positive days.