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.
"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.
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