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United Parcel Service, Inc. Message Board

dudesbag 55 posts  |  Last Activity: Jul 16, 2014 10:09 AM Member since: Oct 3, 2004
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  • Question guys. In this weekend's Philly Inquirer, there was a classified ad for Full-time CDL "A" tractor trailer drivers for the Willow Grove about an hour from the Philadelphia regional air facility. While initially thinking this was great as it suggests more volume, I then wondered why the position wouldn't have been snapped up by a driver with seniority rights to train for the positions. Does it suggest that high seniority drivers might not be interested in the move to feeders? Granted, the position is a night job with weekends off but I had always thought that many of the package drivers would happily trade the rigors of delivery for a less physical job. Beyond that, wouldn't the Teamsters prefer to fill these opening from within? Comments?

  • Monday I sent a letter to CFO Kurt Kuehn. I argued the merits of waiting a year to see how the impact of the dimension weight pricing modification move to be implemented by FDX in 2015 might play out in the eyes of customers. The letter mentioned loyal customers, an immediate inflow of volume, the opportunity to leverage that inflow with sales person contact to thank them and pursue others volumes such as the more margin friendly international or air services and simply differentiating ourselves thru the good will of shippers/receivers everywhere. Additionally, I mentioned that when industry analysts and business magazines look at the two companies they might take a less than favorable view about their other abysmal business practice of the independent contractor home delivery model. Hopefully, articles will connect the "extreme profit mania of Mr. Smith at the expense of everyone else" fervor that is the hallmark of that company. I'm looking forward to a response.

  • Reply to

    laughable

    by drmagoo54 May 13, 2014 1:41 PM
    dudesbag dudesbag May 15, 2014 4:49 PM Flag

    It's all a function of the forward P/E level that the market accepts. 20 seems to be the new norm so that makes $100 a lower base not a higher one. Keep in mind, our operational margins got crushed during peak and Q1 by ongoing weather and volume issues. Once the operations are running smoother again, accelerated volumes =more revenue = more profit right to bottom line. This coming Q will be the first without definitive problems. FDX will give us a preview and then we'll see what our folks say. BTW, do you agree FDX is running scared at this point?

  • dudesbag dudesbag May 15, 2014 2:58 PM Flag

    Moe- should add I was Metro Philly.

  • dudesbag dudesbag May 15, 2014 2:58 PM Flag

    We're similar but you hung in well, well beyond me. Started after college graduation in the unique hybrid position of damage control clerk working for both the C/S and Delivery Info dept's. I was the guy getting the packages that were picked up on a damage call tag or prepared for sending to the package testing lab. Then into C/S as field rep, area manager, phone ctr manager, special assignments for intra-state shipping authority in OK and Texas, back into C/S, transfer to H/R and then chose to pursue other interests. All that in 20 years sort of surprises me. Impeccable timing though, with stock rise and then IPO splits. Had my own s-corp business contracting with the county for awhile before politics got the best of me. VGR is a unique one for sure and views vary but they've held their dividend and stock dividend true. BTW, if you're interested, today I picked up on shares pf PVTC a very interesting micro-cap that is going from the OTC to the NYSE tomorrow. It deals with end of successful trial products to address a host of cancers and dematologic conditions. Pfizer is an associated party. Great Seeking Alpha summary about them. You're absolutely right about covered calls. I started maybe 5 years ago and did well until the recent spate of having to buy them back. So, I'm 63- you close?

  • dudesbag dudesbag May 15, 2014 8:58 AM Flag

    I agree that solid growing and consistent dividend payers are the way to go. People forget that the long-held near 10% historical growth of money invested on the market is almost 40% due to compounded reinvested dividends. I'd like to see a study comparison of just companies that were not dividend payers. In any event, I'm glad you brought up Seaspan s I'd forgotten about them. See what you think when you compare SSW and SFL. I like SFL's slightly higher dividend and the fact that they play in about 7 or 8 of the marine sectors (dry bulk, tanker, drilling units. etc) so it's like buying a diversified ETF. Also, if you've got the stomach for it, VGR (Vector Group) is a cigarette play with a 9% dividend AND a 5% stock dividend each year with a very consistent history of doing so. The major investor, Dr. Phillip Frost, pretty much insists upon it and they manage to get it done. But, you've got a very nice portfolio that let's you sleep well at night. BTW, you do any UPS covered calls? Your career- Where, what and when at UPS?

  • dudesbag dudesbag May 14, 2014 6:34 PM Flag

    Funny thing about CLNE. I figured they were the best natural gas infrastructure play for the freight industry and bought a decent amount of shares. Clearly, it's going to take a long time for this to catch on to the point where it's an investable idea. I'm now taking a peak at the bulk shipping and container ship industry again. They're rising off multiple year lows and spot rates and contract agreements are much higher than in recent years. Also, it's not unusual to find 9% dividend payers that have been consistent. Anyone interested should take a peak at SFL and NMM. For tankers, NAT is an interesting choice that pays 11.2% dividend. Anyone else looking at them?

  • Reply to

    laughable

    by drmagoo54 May 13, 2014 1:41 PM
    dudesbag dudesbag May 13, 2014 5:24 PM Flag

    Well good Doctor there is an alternative way to look at things. If one reverts back to the tried and true method of analyzing the Price/Earnings ratio, the price is very reasonable. Keep in mind that for years and years the price was stagnant. We're still in the catch up mode. In recent years, a P/E of around 20 is the sweet spot and well earned. Presently we're at 22.7. If we meet the earnings expectation for next year of $5.90, which is very achievable particularly with the FDX dimension shipping charge impact, the P/E at $102.50 is 17.37. So, we could easily have a target of 20 X $5.90 or $118. BTW, I'm not sure why you think they can't make $5.15. That is just above the lowest of the revised range. I'd like to think that with the facility improvements and the attention to an improved peak for this year, things will be smooth this year. It would be hard to envision weather anywhere close to the 2013/early 2014 anamolies. Of course, time will tell. Now if you want an example of laughable, look at the FY ending May, 2015 EPS projections for our good friends FDX.

  • Barclay's downgrades FDX on stagnant profitability and moves their target from $160 to $140 (current FDX share price). UPS'ers have to love the rationale. The analyst noted that despite the excitement surrounding FDX's profit improvement plan (express division buyouts, air fleet upgrades) and share buyback, he criticized their approach to sacrifice value creation simply to pursue growth. He adds, "However, with a culture and incentive structure aligned to drive near-term growth at the expense of capital returns, we believe transformation at FDX will take much longer than initially hoped." Here's the kicker, "...the management team needs to understand market competitiveness....balancing the finances and interests of customers and shareholders will make results difficult to obtain." So, what does Fred Smith and his minions do? They decide to attack the profitability issue by passing on additional costs to their customers through expanded dimension based shipping charges. In effect, satisfy the shareholders at the expense of the customers. This after starting to really feel the heat over their home delivery independent contractor disgraceful shipping model. I really hope UPS holds off on matching the 2015 FDX shipping charges move until at least 2016. Show its customers and new ex-FDX customers what customer loyalty really is. Our profit levels are fine.

  • Reply to

    please explain

    by ayatollayouso May 8, 2014 12:34 PM
    dudesbag dudesbag May 12, 2014 4:09 PM Flag

    Good points. I'm hoping that UPS simply leaves its rates alone for at least a year after FDX implements its new policy. You're right, we stand to get a bunch of "gift" volume from ex-FDX users that would flow right into our established operations network. It's like having a whole bunch of sales representatives in the field for free. The added bonus is as soon as we identify this new volume, we would visit the shipper to try to optimize their use of UPS in every mode- from international, to express and even ocean. To my way of thinking, matching the FDX policy would be short-sighted. We should be pleased with our profitability as EPS have been on the rise every year. Why become greedy just because the slimeball IC- user, Fred Smith desires untold millions more to be added to his wealth/

  • Reply to

    Postal Service posts another quarterly loss

    by low_mac May 9, 2014 1:11 PM
    dudesbag dudesbag May 9, 2014 2:46 PM Flag

    low_mac-oddly enough some thing are improving. The SmartPost and SurePost collaborations with FDX and UPS are helping. The Sunday delivery trial with Amazon was successful enough in the L.A. and NYC metro areas to add 15 cities soon. So, despite overall volume dropping by 1.8% and first class by 4.3%, they are hanging tough. There was a curious story about comparing the Google delivery product internet ordering network vs. the Amazon/Post Office collaboration. Google met their same day time window with delivery made by 2 guys wearing Google shirts. The Post Office delivery was many hours later actually in the evening. So, it would appear at least in that simple survey that it's better to totally control your own delivery operation. What this might mean to UPS down the road is hard to say.

  • The March year-over-year increase was 3%. This is the lowest increase since November of last year. In February the increase was 4.3% and January 3.9%. This probably has something to do with the Barclay's recent downgrade on stagnating profits. A lot of scrambling going on a good, old FDX....

  • dudesbag dudesbag May 8, 2014 1:55 PM Flag

    Pipedream. We were squeezed to come up with the $6.8B offer for TNT. Analysts project the Alibaba IPO to beat the record $16B Facebook IPO. Analysts are valuing Alibaba at $170-$200B. Chinese companies are historically hard to deal with as is their government as evidenced by FDX and UPS difficulties in renewing charters. The best case scenario would be some sort of partnership. Keep in mind, Alibaba sales dwarf Amazon and E-Bay combined. They also have their own version of PayPal.

  • Reply to

    lets talk dividend

    by norjoa1 May 5, 2014 1:32 PM
    dudesbag dudesbag May 7, 2014 5:39 PM Flag

    Covered calls were a great way to supplement income as long as the share price remained in a defined range. Recently, shares have gained too much to make it all that effective. Essentially, you collect a premium for offering your shares for sale at a pre-determined price sometime in the future. Ideally, the call would expire without reaching the target value and you'd simply keep the premium. I've never had to surrender shares but in recent years I've had to buy some of the calls back. That of course defeats the purpose and can cost money like any other investment. But for years it was a great way to sometimes get up to 25% or even 50% of the dividend amount. I've always done it through a broker so it cost me some for the piece of mind. Beyond that, I always try to limit my stock sells to around 3% of my holdings. That way I can pay down my Hypo loan (do we all have one?) but always increase my dividend income, and if share prices drop, get back into the covered call game. I'm divorced with no mortgage and a son with a great career going so I can live a bit more spartanly than many.

  • Reply to

    lets talk dividend

    by norjoa1 May 5, 2014 1:32 PM
    dudesbag dudesbag May 7, 2014 1:40 PM Flag

    Yeah- so far my timing has been advantageous. Early retirement from UPS with share price low and really helped by the 1999 stock split. Can't believe it's been over 20 years since I left UPS. Careful management of dividends and until recently, getting nice returns from covered calls, has done the trick. As you no doubt note, I spend a lot of time trying to analyze the future stock prices of UPS and FDX. It's really hard to do moreso in the case of FDX where their 2015 EPS projections seems way too based upon an improving economy. Now that the revised 2014 Q1 might come up as negative, a second quarter below even would classify as a recession. To have either stock hold their present levels would be remarkable. I guess the wild card is internet shipping and what happens in China with the restrictions both carriers face. One thing for sure, I think investors will be leaning towards solid dividend plays and FDX is particularly weak in that regard.

  • Reply to

    lets talk dividend

    by norjoa1 May 5, 2014 1:32 PM
    dudesbag dudesbag May 7, 2014 8:53 AM Flag

    In Pennsylvania right near Philly. 20 years with 17 in management. Just a bit a way from Medicare/social security.

  • I was just watching a Bloomberg representative describing the U.S. based Alibaba IPO coming up shortly. He described Alibaba as an internet giant sort of like Amazon and Google combined. He stated that they are doing the IPO in America so they can better access international investment markets. He went on to say that the notion of retail shopping is much less prevalent in China and it is by far the largest growing internet shopping/shipping entity in the world. As he was finishing up I'm thinking here you have a restrictive government in China that has been giving UPS and FDX a hard time in re-issuing operations permits. I'm thinking, "OK, you want the best of all worlds within the U.S. stock market? All we ask in return is a fair competitive standing against other shippers in your country." Is that too outlandish a deal?

  • Reply to

    lets talk dividend

    by norjoa1 May 5, 2014 1:32 PM
    dudesbag dudesbag May 6, 2014 5:06 PM Flag

    You're welcome Norjoa1. BTW, what part of the country are you from and, if you're retired. when? You're a pretty savvy poster so I hope you don't mind me asking....

  • Reply to

    lets talk dividend

    by norjoa1 May 5, 2014 1:32 PM
    dudesbag dudesbag May 6, 2014 3:35 PM Flag

    norjoa1- it should go ex-dividend this week. Looking back for the last 4 years, the payable date for the Q2 dividend was never later than June 2. in 2013 it was 5/29, 2012 it was 5/30, in 2011 6/1 and back in 2010 6/2.

  • Received this yesterday. I notice that we dropped from almost 91% at the end of 2012 to just under 85.2% at the end of 2013. I thought the new obligations were to close in towards !00%- not go backwards. Does anyone have a handle on this? I think this pertains to non-union only- perhaps just management. In any event, I'd rather see us spend more on funding the pension plan than buying back UPS shares unless we experience a dip. Thoughts?

UPS
104.48+0.42(+0.40%)Jul 22 4:00 PMEDT

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