Feed Me! Nom! Nom! Nom!
Again, my friends, I must apologize for my scarceness on these pages. I know there are times when many of you may plead for my acquittal from this site, as there are times (due to my acute boredom and incipient ADD) I am here commenting like an Algonquin Round Table wag at the height of the Flapper Era. You must get sick of that.
But if December is always a rough month in my business, then the last week of December is often the grande chancre (sic) beyond all imaginings. It’s been ever thus, and it doesn’t matter if I take the week off from work or not (and I do, in the grand tradition of my own bosses past, thereby leveraging my subordinates and allowing me some time with the family), as the former “filter” I thought I had constructed has fallen, by steps, to the technological immediacy of first voicemail, then e-mail, and finally (shudder) Skype. And to think, this is not even a “capital gains lock-in” year. Oy.
To make matter worse, this has also been the traditional week when Mrs. Gint gets together with her Wyrd Sisters and our aggregate families (10 children in all) here in town. So between entertaining between 18-20 people (depending on when grandparents and great aunts/uncles/cousins arrive) a day/night, and juggling three live deals and one dying one via electronic media, I end up neglecting you, dear reader. Again, I beg your pardon.
For those of you who were thinking that “The Stock of 2012” would be of the “precious” bent, well, good for you. Valuations are at 52 week minimums about now for most of my favourites and if you are a loyal subscriber to The PPT, you know that most are also reading “oversold!” in a big way as well.
(Aside: You are crazy if you are not taking advantage of this end of year special for The PPT, as the overall market hybrid alone has been knocking the cover off the ball for those using the patented “Fly Step-in Methodology” for entrance and exit).
Well, yes, this is a good time to be accumulating SLW, EXK and AG, and GDXJ for the new year, if only for an oversold bounce (if you are feeling chicken).
But this year’s Pick of the Year is going to be something you can put away for a longer to near terminal hold. It’s the tightest ship in the shipping bidness (sic)– United Parcel Service (UPS). I am biased, as I’m a long time holder of this King of the Transports (and the $TRAN weekly is looking very smart here, btw), but I think that 2012 may be the year that UPS finally “breaks through.”
Fundamentals are not my bag, so I won’t belabor them, but it is important to note that UPS is the market leader in package transport, with over 15 million pieces moved a year (over double that of rival FDX). What’s more, despite its unionized work force (Teamsters and Independent Pilots Union), UPS manages to eke out considerably better margins (about 350 basis points better) than the flashy FedEx purple people, most likely due to its entrenched market presence and it’s flexibility in trucking delivery (for example, UPS delivers 1-day, 2-day and regular business deliveries all from the same vehicle route, while FedEx uses wholly different carriers for the different delivery times).
Of course UPS also offers a fatter dividend. At 2.80% at current market prices (and I’d like to buy it closer to 3.0% anyway), it is about 220 basis points better than rival FDX. UPS is a cash cow, with $3.5 billions in free cash to either reinvest in new planes and trucks or to mail back to shareholders. UPS also uses that cash to buy back shares, which is of course accretive to overall value.
But UPS is also a great hold for the future, as well. Any good wife will tell you… the wave of the future is internet delivery of just about everything. And if you love AMZN, God bless, they are a great company, but by no means impregnable from a barriers to entry standpoint. Now, how would you like to try to start up a rival package delivery service that will meet up to Amazon’s exacting demands (not to mention your mother in law’s)?
See where I’m going with this?
Last but not least, from a technical standpoint, UPS is again nearing all time highs, which it will eventually have to surmount. Like one of my better gold picks this year– AUY–, UPS has been attempting to break that “lid” at $75 for while now. If earl prices remain somewhat accomodating, then I think this may be our year. Note my weekly, which shows the formation that marks the $TRAN itself… a 13-week/34-week EMA crossover (the weekly “golden cross”) and an attempt at breaking to new highs:
And my daily chart shows where I’d like to enter… at the 20-day EMA, if possible:
And that is all for now, boys and girls. I will be back with some predictions for 2012… I hope before the dawning of that auspicious, and seemingly most pre-benighted year.
Best to you all.