JMo Capital
Connect and keep up!
  • Home
  • Blog
  • Media
  • Stuff I've Done
  • About
  • Watercolors

Why Any of This Matters

If you don't write down what you're thinking, you're short-selling yourself on some of your best ideas. That's why this is here.

Latest Fool.com Articles

Masters-ful Stock Ideas: Wednesday

4/6/2016

0 Comments

 
Picture
It’s no secret that ecommerce is a major long-term trend that is just starting to take hold. More and more businesses are discovering the value in selling their goods and services over the Internet and thanks to businesses like Amazon.com this is becoming the new normal. What this all means is that stuff needs to get from the seller to the buyer and that’s where today’s idea, UPS (NYSE: UPS) shines.

The Masters has an extremely limited number of global sponsors; five to be exact. And UPS is one of them. And why not? It is after all based in Atlanta, GA just a hop skip and a jump from Augusta National and it’s the world’s largest package delivery company. In fact in 2015 UPS delivered 4.7 billion packages and documents in more than 220 countries and territories.

One of the questions investors have been asking of late is in regard to Amazon’s shipping aspirations and whether that poses a threat to UPS and its ilk. While it’s not smart to underestimate anything Jeff Bezos sets his mind to, it’s also worth recognizing the fact that ecommerce today represents still just a small sliver of overall retail sales domestically; less than 10% to be exact. In other words, while there’s no question that Amazon will become a bigger part of this space going forward, there is going to be a lot of room to play in this sandbox and UPS has the brand, the reputation and the resources to help lead the way.

UPS is in good financial shape with $4.7 billion in cash and equivalents on the balance sheet. And while it maintains $14.3 billion in debt, that debt is stretched out nicely over many years and operating income covers net interest expense 24 times over. Of course a business like UPS will likely feel a bit of a pinch during times of higher fuel costs, but often those costs can be passed along to the customer in some capacity. There will be times when margins are challenged, but the longer the investor can stretch his or her timeline with UPS the better off they will be. With shares under 20 times trailing earnings today and a Masters-worthy dividend yield of 3%, UPS looks like a low risk way for investors to give their portfolio some nice stable growth.

Disclosure: I own shares of Amazon.com.

​Risk: Low

0 Comments



Leave a Reply.

    Author

    My name is Jason A. Moser and I'm lucky enough to have a job doing what I love to do: investing. But my family, golf, music, watercolors, reading, writing, current events...these are all things that matter to me. Consider yourself warned.

    Archives

    October 2018
    September 2018
    June 2018
    May 2018
    March 2018
    January 2018
    November 2017
    August 2017
    July 2017
    May 2017
    April 2017
    March 2017
    February 2017
    November 2016
    October 2016
    September 2016
    August 2016
    April 2016
    January 2016
    December 2015
    November 2015
    October 2015
    July 2015
    June 2015
    April 2015
    January 2015
    November 2014
    March 2014
    February 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013

    Categories

    All

    RSS Feed

Powered by Create your own unique website with customizable templates.