Fedex is a much safer stock to own , why ?
It has 20% of the valuation of UPS on a price to book ratio and its combination of 300% better profit margins and triple the profit margin of UPS
Despite this Fedex is crashing as if it is an airliner in distress .
Can UPS be far behind with its ridiculous valuation levels ,
Price to Book for UPS seems very very high--around 17 whereas Price to Book for FDX is about 2.
Revenue and earnings growth for UPS is not very strong. Part of the boost in EPS seems to be stock buyback related--2% few shares since last year. For some reason, stock prices seem to focus more on earnings than book value. I think Buffet would consider book value in evaluating a stock than seems to be the case here for UPS: Buffet would not pay $83 for UPS, maybe closer to $50.