NEW YORK (TheStreet) -- United Parcel Service (UPS - Get Report) had a downside break in January, but it has spent the rest of the year in repair mode and looks like it can deliver better returns ahead.
In the UPS chart above, we can see the sideways price action since January. Prices have moved back and forth around the 50- and 200-day moving averages. Note that the slope of the 50-day moving average has turned up in the chart above. Another positive is the rising On-Balance-Volume (OBV) line.
The long-term chart of UPS, above, is impressive. Prices have been trending higher since early 2009 and the OBV line has been confirming the entire rally. Prices are above the 40-week (200-day) moving average and the whole picture suggests higher prices ahead for this member of the Dow Transportation Average.
Separately, TheStreet Ratings team rates UNITED PARCEL SERVICE INC 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 a number of strengths, 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 solid stock price performance, increase in net income, notable return on equity, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Air Freight & Logistics industry. The net income increased by 170.9% when compared to the same quarter one year prior, rising from $454.00 million to $1,230.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength 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 significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 442.06% to $1,488.00 million when compared to the same quarter last year. Despite an increase in cash flow, UNITED PARCEL SERVICE INC's cash flow growth rate is still lower than the industry average growth rate of 486.90%.
- UNITED PARCEL SERVICE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNITED PARCEL SERVICE INC reported lower earnings of $3.28 versus $4.62 in the prior year. This year, the market expects an improvement in earnings ($5.28 versus $3.28).
- You can view the full analysis from the report here: UPS