| 2015 | 2016 | 2018 | 2019 (projected) | United Parcel Consolidated Income | 4,844,000,000 | 3,431,000,000 | 3,087,900,000 | 2,911,131,579 | United Parcel Direct Expenses | 11,925,000,000 | 12,785,000,000 | 18,568,000,000 | 15,238,821,053 |
United Parcel is down -0.22 percent against market upswing
 | By Ellen Johnson | Macroaxis Story |
This post is geared to all United Parcel management as well as to investors considering exiting their position in the enterprise. I will evaluate if United Parcel shares are sensibly priced going into August and whether management should be worried. This firm Piotroski F Score is 4 - Ordinary. Considering 30-days investment horizon, United Parcel is expected to under-perform the market. In addition to that, the company is 1.9 times more volatile than its market benchmark. It trades about -0.01 of its total potential returns per unit of risk. The market is currently generating roughly 0.07 per unit of volatility. What is United Parcel Target Price Odds to finish over Current Price? In regard to normal probability distribution, the odds of United Parcel to move above current price in 30 days from now is about 15.79%. The United Parcel Service probability density function shows the probability of United Parcel Stock to fall within a particular range of prices over 30 days . Considering 30-days investment horizon, the stock has beta coefficient of 1.2799 . This entails as the benchmark fluctuates upward, the company is expected to outperform it on average . However, if the benchmark returns are expected to be negative, United Parcel will likely underperform. Additionally, the company has a negative alpha implying that the risk taken by holding this equity is not justified. United Parcel Service is significantly underperforming S&P 500.
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Reviewed by Michael Smolkin
UNITED PARCEL SVC has roughly 5.11B in cash with 664.5M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 5.94. United Parcel dividends can provide a clue to current valuation of the stock. The firm one year expected dividend income is about $1.77 per share. Earning per share calculations of the firm is based on official Zacks consensus of 10 analysts regarding United Parcel Service future annual earnings. Given the historical accuracy of 99.54%, the future earnings per share of the company is estimated to be 7.4631 with lowest and highest values of 7.3 and 7.55 respectively. Please note that this consensus of annual earnings estimates for the entity is an estimate of EPS before non-recurring items and including employee stock options expenses.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as United Parcel. Your research has to be compared to or analyzed against United Parcel's peers to derive any actionable benefits. When done correctly, United Parcel's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in United Parcel Service.
Investing in United Parcel, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding United Parcel along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of United Parcel's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is United Parcel's Liquidity
United Parcel financial leverage refers to using borrowed capital as a funding source to finance United Parcel Service ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. United Parcel financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to United Parcel's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of United Parcel's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between United Parcel's total debt and its cash.
United Parcel Gross Profit
United Parcel Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing United Parcel previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show United Parcel Gross Profit growth over the last 10 years. Please check United Parcel's gross profit and other fundamental indicators for more details.
United Parcel Correlation with Peers
Investors in United can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in United Parcel Service. Diversification will allow for the same portfolio return with reduced risk. The correlation table of United Parcel and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities United is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of United for more details
Going after United Financials
The small decline in market price for the last few months has created some momentum for investors as it was traded today as low as 102.38 and as high as 105.12 per share. The company directors and management did not add much value to United Parcel Service investors in June. However, diversifying your holdings with United Parcel Service or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 1.478. The below-average Stock volatility is a good sign for a longer term investment options and for buy-and-hold investors. United Parcel maintains total asset of 38.31b. United Parcel is trading at 102.97 which is 0.22 percent down. Opened at 102.97. United Parcel Trade and Non Trade Receivables is increasing over the last 5 years. The latest value of United Parcel Trade and Non Trade Receivables is 6,239,947,368. Also, United Parcel Gross Profit is increasing over the last 5 years. The latest value of United Parcel Gross Profit is 13,130,000,000.
To conclude, our analysis show that United Parcel Almost mirrors market. The enterprise is overvalued and projects probability of distress below average for the next 2 years. Our immediate 'Buy/Hold/Sell' recommendation on the enterprise is Strong Hold.
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