Trade-Ideas: United Parcel Service Inc (UPS) Class B (UPS) Is Today's Momo Momentum Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified United Parcel Service Inc (UPS) Class B (UPS) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified United Parcel Service Inc (UPS) Class B as such a stock due to the following factors:
- UPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $248.9 million.
- UPS has a PE ratio of 97.7.
- UPS is currently in the upper 30% of its 1-year range.
- UPS is in the upper 25% of its 20-day range.
- UPS is in the upper 35% of its 5-day range.
- UPS is currently trading above yesterday's high.
- UPS has experienced a gap between today's open and yesterday's close of 0%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.EXCLUSIVE OFFER: Get the inside scoop on opportunities in UPS with the Ticky from Trade-Ideas. See the FREE profile for UPS NOW at Trade-IdeasMore details on UPS: United Parcel Service, Inc., a package delivery company, provides transportation, logistics, and financial services in the United States and internationally. It operates in three segments: U.S. Domestic Package, International Package, and Supply Chain and Freight. The U.S. The stock currently has a dividend yield of 2.9%. UPS has a PE ratio of 97.7. Currently there are 9 analysts that rate United Parcel Service Inc (UPS) Class B a buy, no analysts rate it a sell, and 11 rate it a hold.The average volume for United Parcel Service Inc (UPS) Class B has been 3.3 million shares per day over the past 30 days. United Parcel Service Inc (UPS) Class B has a market cap of $62.7 billion and is part of the services sector and transportation industry. The stock has a beta of 0.69 and a short float of 2.2% with 5.74 days to cover. Shares are up 18.2% year to date as of the close of trading on Friday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates United Parcel Service Inc (UPS) Class B as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 1.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has slightly increased to $1,673.00 million or 6.56% when compared to the same quarter last year. In addition, UNITED PARCEL SERVICE INC has also modestly surpassed the industry average cash flow growth rate of 2.70%.
- UNITED PARCEL SERVICE INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, UNITED PARCEL SERVICE INC reported lower earnings of $0.80 versus $3.83 in the prior year. This year, the market expects an improvement in earnings ($4.75 versus $0.80).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Air Freight & Logistics industry and the overall market, UNITED PARCEL SERVICE INC's return on equity exceeds that of both the industry average and the S&P 500.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full United Parcel Service Inc (UPS) Class B Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV