+ Watch UPS
on My Watchlist
The world’s largest package delivery company, UPS has spread brown around the world to enable global commerce.
If it moves, UPS moves it. More importantly, they move it more efficiently and more profitably than FDX or anyone else. Super high barriers to entry. Extremely wide moat. Great dividend. Wonderful company at a reasonable price. Long term hold.
With an est. 8% div growth rate, I expect UPS to pay about $14.50 in dividends over the next 5 years, dropping my cost basis to about $59.24. If sales grow at just 3% over the next 5 years, and buybacks continue at -1.5%, and we assume a conservative p/s ratio of 1.5, then you have a $100 stock over the next 5 years. $59.24 growing to $100 in 5 years is 10.7% annualized. While UPS probably won't smash the market, I do think it will outperform over a 5-10 period, and UPS has one of the best moats around.HOLD IN CAPS FOREVER!
I liquidated my stake in UPS today, and reaped a gain of 19.87%, including dividends. The position was initiated about 12.5 months ago, and this marks the first shares I've sold, of any company, in the 13 or so months that I've been investing.Additionally, I have reallocated that capital into a new position in Leucadia National Corp. (LUK)My newly updated portfolio of common stocks is allocated as follows:Berkshire Hathaway, Inc (BRK. – (20.6% of portfolio)Coach, Inc COH) – (20.5% of portfolio)The McDonald’s Corporation – (17.9% of portfolio)Advance Auto Parts, Inc (AAP) (14.8% of portfolio)International Business Machines Corp. (IBM) (14.0% of portfolio)Leucadia National Corporation (LUK) (12.2% of portfolio)
Great company, although a little bumpy over time as far as earnings/cash flows go.I expected a $100 price in 5 years (from 2011), not 2 years.I am no longer comfident in this equities ability to beat the S&P at this valuation.(16x normalized EBIT, 20x normalized FCF) but will be happy to re-open the pick, should the relative valuation become more attractive in the future.
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