With shares of United Parcel Service (NYSE:UPS) trading around $90, is UPS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let�� analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s MovementUnited Parcel Service is a package delivery company. The company delivers packages each business day for 1.1 million shipping customers to 7.7 million consignees in over 220 countries and territories. Last year, United Parcel Service delivered an average of 16.3 million pieces per day worldwide or a total of 4.1 billion packages. It serves the global market for logistics services, which include transportation, distribution, forwarding, ground, ocean and air freight, brokerage, and financing. United Parcel Service operates in three segments — U.S. Domestic Package, International Package, and Supply Chain & Freight.
United Parcel Service�� labor union woes still haven�� been resolved, according to the Wall Street Journal, and the shipping company is under pressure as the busy holiday season approaches. Teamsters-represented employees rejected two out of seven riders to their contract. The contract supplements that were rejected have to do with overtime pay, wages for part-time employees, and health-care. The Wall Street Journal said that UPS still has “a lot more work to do” before each rider on the contract that was approved in June is negotiated and UPS can move forward without the danger of potential labor disputes.
Top 5 Services Companies To Own In Right Now: TNT Express NV (TNTE)
TNT Express NV is the Netherlands-based express delivery company. It collects, transports and delivers documents, parcels and freight on a time-certain or day-definite basis. The Company operates worldwide with domestic, regional and intercontinental delivery. It has own operations in more than 60 countries and can deliver to more than 200 countries through own operations, subcontractors and agents. Its customers are international companies, as well as small and medium enterprises. The Company serves industries such as technology, automotive, industrial, healthcare and lifestyle, as well as financial institutions and governments. The Company operates interconnected international air and road networks. The air network consists of a central air hub in Liege, Belgium, and a fleet of more than 50 aircrafts. The road networks are operated in Europe, the Middle East, Asia, Australia and South America. Advisors' Opinion:- [By Inyoung Hwang]
TNT Express NV (TNTE) lost 4.3 percent to 6.33 euros, its lowest price in four months. PostNL NV, the Dutch mail service with operations in the U.K. and Germany, said it will sell about half of its 29.8 percent stake in the Dutch package-delivery company to reduce debt. The 15 percent stake up for sale is valued at about 540 million euros ($738 million), according to data compiled by Bloomberg. PostNL gained 1.8 percent to 4.17 euros.
- [By Robert Wall]
One of the country�� largest employers with more than 150,000 staff, Royal Mail has shifted away from letters to more lucrative package shipping, competing with TNT Express NV (TNTE) of the Netherlands and Deutsche Post AG (DPW)�� DHL Express.
Hot Freight Stocks To Watch Right Now: Agility Public Warehousing Co KSC (AGLTY)
Agility Public Warehousing Company KSC is a Kuwait-based company engaged, along with its subsidiaries, in the provision of global integrated logistics solutions. The Company is organized into two business segments: the Logistic and Related services segment provides logistics offering to its clients, including freight forwarding, transportation, contract logistics, project logistics and fairs and events logistics, and the Infrastructure segment provides other services, which include industrial real estate airport and airplane ground handling and cleaning services, customs consulting, private equity and waste recycling. The Company operates under the brand name of Agility. The Company�� subsidiaries include Global Express Transport Co. WLL, PWC Transport Company WLL, Agility DGS Logistics Services KSCC and Gulf Catering Company for General, among others. Advisors' Opinion:- [By Fiona MacDonald]
The Kuwait SE Price Index rose for a sixth day, climbing 0.5 percent to 6,851.17 at the close. Kuwait Real Estate Co. (KRE) climbed to the highest level in a month. Agility (AGLTY) advanced 1.7 percent after winning a $190 million UN contract in Sudan�� Darfur region. The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the Gulf Cooperation Council, fell 0.1 percent.
Hot Freight Stocks To Watch Right Now: Forward Air Corp (FWRD)
Forward Air Corporation operates in two segments: Forward Air, Inc. (Forward Air) and Forward Air Solutions, Inc. (FASI). Through the Company's Forward Air segment, it is a provider of time-definite surface transportation and related logistics services to the North American deferred air freight market. It offers its customers local pick-up and delivery (Forward Air Complete) and scheduled surface transportation of cargo. It transports cargo that must be delivered at a specific time but is less time-sensitive than traditional air freight. As of December 31, 2011, it operated its Forward Air segment through a network of terminals located on or near airports in 85 cities in the United States and Canada, including a central sorting facility in Columbus, Ohio and 12 regional hubs serving key markets. It also offers its customers an array of logistics and other services including expedited full truckload (TLX); dedicated fleets; warehousing; customs brokerage; and shipment consolidation, deconsolidation and handling. During the year ended December 31, 2011, approximately 23.9% of the freight it handled was for overnight delivery, approximately 61.3% was for delivery within two to three days and the balance was for delivery in four or more days. Through its FASI segment, it provides pool distribution services throughout the Mid-Atlantic, Southeast, Midwest and Southwest continental United States. Pool distribution involves managing high-frequency, last mile handling and distribution of time-sensitive product to destinations in geographic regions. In March 2013, it acquired Total Quality, Inc. In February 2014, Forward Air Corporation acquired Central States Trucking Co. and Central States Logistics, Inc. from Central States Inc.
Forward Air
The Company receives freight from air freight forwarders, integrated air cargo carriers and passenger and cargo airlines at its terminals, which are located on or near airports in the United States and Canada. It also picks up freight from custo! mers at designated locations via our Forward Air Complete service. It transports these shipments by truck through its network to its terminals nearest the destinations of the shipments. It operates scheduled service to and from each of its terminals through its Columbus, Ohio central sorting facility or through one of its 12 regional hubs. It also operates scheduled shuttle service directly between terminals where the volume of freight warrants bypassing the Columbus, Ohio central sorting facility or a regional hub. When a shipment arrives at its terminal nearest its destination, the customer arranges for the shipment to be picked up and delivered to its final destination, or it, in the alternative, through its Forward Air Complete service, deliver the freight for the customer to its final destination. Its airport-to-airport network consists of terminals located in the 85 cities. As of December 31, 2011, independent agents and FASI operate 18 and two of its Forward Air locations.
The Company operates direct terminal-to-terminal services and regional overnight service between terminals where justified by freight volumes. It provides regional overnight service to the markets within its network. Direct shipments also reduce the likelihood of damage because of reduced handling and sorting of the freight. It operates regional hubs in Atlanta, Charlotte, Chicago, Dallas/Ft. Worth, Denver, Kansas City, Los Angeles, New Orleans, Newark, Newburgh, Orlando, and Sacramento. During 2011, the average weekly volume of freight moving through its network was approximately 34.0 million pounds per week. During 2011, its average shipment weighed approximately 717 pounds and shipment sizes ranged from small boxes weighing only a few pounds to large shipments of several thousand pounds.
The Company�� logistics and other services allow customers to access services from a single source: expedited full truckload (TLX); dedicated fleets; customs brokerage, such as assistance with the United States C! ustoms an! d Border Protection (U.S. Customs) procedures for both import and export shipments; warehousing, dock and office space; drayage and intermodal; hotshot or ad-hoc ultra expedited services, and shipment consolidation and handling, such as shipment build-up and break-down and reconsolidation of air or ocean pallets or containers.
Forward Air Solutions
Through the Company�� FASI segment, it provides pool distribution services through a network of terminals and service locations in 19 cities throughout the Mid-Atlantic, Southeast, Midwest and Southwest continental United States. Pool distribution involves managing high-frequency handling and distribution of time-sensitive product to destinations in specific geographic regions. Its customers for this product are regional and nationwide distributors and retailers, such as mall, strip mall and outlet-based retail chains. Its pool distribution network consists of terminals and service locations in the 19 cities. Its Forward Air wholesale customer base is comprised of freight forwarders, integrated air cargo carriers and passenger and cargo airlines. Its air freight forwarder customers vary in size from independent, single facility companies to international logistics companies, such as SEKO Worldwide, AIT Worldwide Logistics, Expeditors International of Washington, Associated Global, UPS Supply Chain Solutions and Pilot Air Freight. Its FASI pool distribution customers are consisted of national and regional retailers and distributors, such as The Limited, The Marmaxx Group, The GAP, and Aeropostale. The Company also participates in air cargo and retail trade shows and advertise its services through direct mail programs and through the Internet via www.forwardair.com and www.forwardairsolutions.com.
Advisors' Opinion:- [By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Forward Air (Nasdaq: FWRD ) , whose recent revenue and earnings are plotted below.
Hot Freight Stocks To Watch Right Now: Con-way Inc (CNW)
Con-way Inc. (Con-way), incorporated in 1958, provides transportation, logistics and supply-chain management services for a wide range of manufacturing, industrial and retail customers. Con-way�� business units operate in regional and transcontinental less-than-truckload and full-truckload freight transportation, contract logistics and supply-chain management, multimodal freight brokerage, and trailer manufacturing. Con-way is divided into four segments: Freight, Logistics, Truckload, and Other. At December 31, 2011, Con-way Freight operated 286 freight service centers, of which 144 were owned and 142 were leased. At December 31, 2011, Con-way Freight owned and operated approximately 9,200 tractors and 26,400 trailers, including tractors held under capital lease agreements.
Freight
The Freight segment consists of the operating results of the Con-way Freight business unit. Con-way Freight is a less-than-truckload (LTL) motor carrier that utilizes a network of freight service centers to provide day-definite regional, inter-regional and transcontinental less-than-truckload freight services throughout North America. LTL carriers transport shipments from multiple shippers utilizing a network of freight service centers combined with a fleet of line-haul and pickup-and-delivery tractors and trailers. Freight is picked up from customers and consolidated for shipment at the originating service center. Freight is consolidated for transportation to the destination service centers or freight assembly centers. At Freight assembly centers, freight from various service centers can be reconsolidated for transportation to other freight assembly centers or destination service centers. From the destination service center, the freight is delivered to the customer. Typically, LTL shipments weigh between 100 and 15,000 pounds. In 2011, Con-way Freight�� average weight per shipment was 1,305 pounds.
Logistics
The Logistics segment consists of the operating results o! f the Menlo Worldwide Logistics business unit. Menlo Worldwide Logistics develops contract-logistics solutions, which can include managing complex distribution networks, and providing supply-chain engineering and consulting, and multimodal freight brokerage services. Menlo Worldwide Logistics��supply-chain management offerings are primarily related to transportation-management and contract-warehousing services. Transportation management refers to the management of asset-based carriers and third-party transportation providers for customers��inbound and outbound supply-chain needs through the use of logistics management systems to consolidate, book and track shipments. Contract warehousing refers to the optimization and operation of warehouses for customers using technology and warehouse-management systems to reduce inventory carrying costs and supply-chain cycle times. For several customers, contract-warehousing operations include light assembly or kitting operations.
Menlo Worldwide Logistics provides its services using a customer- or project-based approach when the supply-chain solution requires customer-specific transportation management, single-client warehouses, and/or single-customer technological solutions. However, Menlo Worldwide Logistics also utilizes a shared-resource, process-based approach that leverages a centralized transportation-management group, multi-client warehouses and technology to provide scalable solutions to multiple customers. Additionally, Menlo Worldwide Logistics segments its business based on customer type. At December 31, 2011, Menlo Worldwide Logistics operated 76 warehouses in North America, of which 55 were leased by Menlo Worldwide Logistics and 21 were leased or owned by clients of Menlo Worldwide Logistics. Outside of North America, Menlo Worldwide Logistics operated an additional 63 warehouses, of which 48 were leased by Menlo Worldwide Logistics and 15 were leased or owned by clients. Menlo Worldwide Logistics owns and operates a small fleet of tr! actors an! d trailers to support its operations, but primarily utilizes third-party transportation providers for the movement of customer shipments.
Truckload
The Truckload segment consists of the operating results of the Con-way Truckload business unit. Con-way Truckload is a full-truckload motor carrier that utilizes a fleet of tractors and trailers to provide short- and long-haul, asset-based transportation services throughout North America. Con-way Truckload provides dry-van transportation services to manufacturing, industrial and retail customers while using single drivers as well as two-person driver teams over long-haul routes, with each trailer containing only one customer�� goods. This origin-to-destination freight movement limits intermediate handling and is not dependent on the same network of locations utilized by LTL carriers. On average, Con-way Truckload transports shipments more than 800 miles from origin to destination. Under its regional service offering, Con-way Truckload transports truckload shipments of less than 600 miles, including local-area service for truckload shipments of less than 100 miles.
Con-way Truckload offers through-trailer service into and out of Mexico through all major gateways in Texas, Arizona and California. For a shipment with an origin or destination in Mexico, Con-way Truckload provides transportation for the domestic portion of the freight move, and a Mexican carrier provides the pick-up, linehaul and delivery services within Mexico. At December 31, 2011, Con-way Truckload operated five owned terminals with bulk fuel, tractor and trailer parking, and in some cases, equipment maintenance and washing facilities. In addition, Con-way Truckload also utilizes various drop yards for temporary trailer storage throughout the United States. At December 31, 2011, Con-way Truckload owned and operated approximately 2,700 tractors and 8,000 trailers, including tractors held under capital lease agreements.
Other
! The Other! reporting segment consists of the operating results of Road Systems, a trailer manufacturer, and certain corporate activities for which the related income or expense has not been allocated to other reporting segments, including results related to corporate re-insurance activities and corporate properties. Road Systems primarily manufactures and refurbishes trailers for Con-way Freight and Con-way Truckload.
Advisors' Opinion:- [By Dan Caplinger]
Navistar hasn't been entirely locked out of the trucking market, though. The company won several contracts from the Defense Department in support of its military vehicles, including its MaxxPro mine-resistant, ambush-protected armored vehicle. On the commercial front, Navistar won part of an order in May from trucking company Con-Way (NYSE: CNW ) , which purchased 200 ProStar vehicles from the company. Still, the fact that rival Paccar (NASDAQ: PCAR ) got an even bigger portion of the Con-Way order is just one more sign of the ongoing struggles Navistar faces.
Hot Freight Stocks To Watch Right Now: Marten Transport Ltd (MRTN)
Marten Transport, Ltd. is a temperature-sensitive truckload carrier. The Company specializes in transporting and distributing food and other consumer packaged goods that require a temperature-controlled or insulated environment. It operates throughout the United States and in parts of Canada and Mexico. The Company operates in two segments: Truckload and Logistics. During the year ended December 31, 2011, approximately 81% of its truckload revenue resulted from hauling temperature-sensitive products and 19% from hauling dry freight. Its long-haul traffic lanes are between the Midwest and the West Coast, Southwest, Southeast, and the East Coast, as well as from California to the Pacific Northwest. It provides regional truckload carrier services in the Southeast, West Coast, Midwest, South Central and Northeast regions.
The Company derives truckload revenue from fuel surcharges, loading and unloading activities, equipment detention and other ancillary services. Its operating revenue also includes revenue reported within its Logistics segment, which consists of revenue from its internal brokerage and intermodal operations, and through its 45% interest in MW Logistics, LLC (MWL), a third-party provider of logistics services to the transportation industry. Brokerage services involve arranging for another company to transport freight for the Company�� customers, while it retains the billing, collection and customer management responsibilities. Intermodal services involve the transport of its trailers on railroad flatcars for a portion of a trip, with the balance of the trip using its tractors or, to a lesser extent, contracted carriers. It focuses on large food and consumer-packaged goods companies whose products require temperature-sensitive services and who ship multiple truckloads per week. As of December 31, 2011, its customers were General Mills and Kraft.
As of December 31, 2011, the Company operated a fleet of 2,281 tractors, including 2,233 company owned tractors and 48 t! ractors supplied by independent contractors. The average age of its company owned tractor fleet at December 31, 2011 was approximately 2.6 years. As of December 31, 2011, it operated a fleet of 4,124 trailers. Most of its trailers are equipped with Thermo-King refrigeration units, air ride suspensions and anti-lock brakes. The average age of its trailer fleet as of December 31, 2011 was approximately 2.4 years.
Advisors' Opinion:- [By Monica Gerson]
Marten Transport (NASDAQ: MRTN) is estimated to post its Q3 earnings at $0.23 per share on revenue of $168.28 million.
CSX (NYSE: CSX) is expected to post its Q3 earnings at $0.43 per share on revenue of $2.95 billion.
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