Thinking Retirement: FedEx and UPS

If I was not just graduating from B-school and short on cash, I would be thinking about where to invest my annual Roth IRA contribution. Don’t know what a Roth IRA is? You better get in the know fast.

This weeks’ announcement that online clothing sales have surpassed computer sales for the first time ever, prompted me to think’ who is the real winner here? Is there a stock worth looking at?

No matter how I slice it, the real winner seems to me to be shipping ’“ not shopping.

Fact: more and more people are buying things off the internet. As more people get internet access and money (China), as they become more comfortable with online commerce practices (PayPal) and as they become more accustomed to online buying (even groceries can be ordered online!) there are going to be a TON of deliveries to make. Who is going to do it? UPS and FedEx. Sure the US Postal service is a player, but they aren’t a publicly traded company and they outsource a lot to the other two.

So I decided to take a peek at the four year comparison:
fedex stock versus UPS

What I like about these stocks is that they are clearly in a growing industry and the barriers to entry are super high so it’s unlikely they will see a major new competitor emerge anytime soon (DHL being an anomaly).

What is interesting from a technical analysis perspective is that the two stocks have seemingly moved in unison until just recently’ I could only speculate as to why this is.

I’m not saying go invest your money in one or both of these companies without your own due diligence, but it does seem like a no-brainer that these are great long-term investments.

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