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TheStreet Open House

Why TheStreet's Jim Cramer and Stephanie Link Are Buying UPS (UPS) Stock

NEW YORK (TheStreet) -- TheStreet's Jim Cramer and Stephanie Link explain why they are buying UPS (UPS) for their Action Alerts PLUS Portfolio.

Link says the stock is down 8% because the company decreased its full-year guidance, but she adds the shipper did so because there is more demand than it thought and it wants to be prepared for the holiday season.

Cramer says UPS had the wrong infrastructure during the most recent holiday season, which caused the company to spend more per package than it should have. He notes FedEx  (FDX) has gotten ahead of UPS but maintains it is a great company with strong yield support.

Must Watch: Jim Cramer & Stephanie Link on Why They are Buying UPS

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He also says UPS and Amazon  (AMZN) are not head-to-head because the latter is using the former. Cramer thinks Wall Street hates UPS, and he notes he and Link have done well recently in buying stocks that Wall Street hates.

Link thinks UPS has pricing power and believes declining oil prices should help the company. They do not have a catalyst near-term, but Cramer says they do not want one because every company that decides to spend recently gets hit, while companies that cut spending have been rising.

Cramer says UPS will go to $80 if it delivers another holiday season like last year's. Link also points out the company's buyback, dividend and November analyst meeting, while Cramer calls it a "very pro-shareholder company."

TheStreet Ratings team also rates UPS as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNITED PARCEL SERVICE INC (UPS) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

You can view the full analysis from the report here: UPS Ratings Report

EXCLUSIVE OFFER: See inside Jim Cramer’s multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.

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.

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