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United Parcel Service (UPS) is currently rated as a Fair Company in my analysis.  The numbers are excellent in certain areas of their operations but their P/E compared to their peers is lower than it should be.  Also, they could stand better growth in Sales as well as better employee productivity.

However, the company is better than many companies and I would never ridicule anyone for owning its stock. I just think there are better companies on the market.

UPS just posted very good returns. If they continue this pace and fix a few other portions of their business, then they will be a Good Company very soon.  The following is from Business First:

United Parcel Service Inc.’s fourth-quarter net income rose 198 percent behind a strong performance from its international package business.

Atlanta-based UPS (NYSE: UPS) said fourth-quarter net income rose to $757 million from $254 million a year earlier. Earnings per share increased to 75 cents from 25 cents during the same period.

UPS’s earnings in the fourth quarter of 2008 included a $548 million goodwill impairment charge in the UPS Freight unit and a $27 million impairment charge in its European package operations.

Fourth-quarter revenue declined 2.5 percent, to $12.4 billion from $12.7 billion. Revenue in UPS’s international package business increased 5.8 percent, to $2.8 billion from $2.7 billion. Revenue in the domestic package operations fell 5.5 percent, to $7.6 billion from $8 billion. Revenue in UPS’s supply chain and freight division fell 1.8 percent, to $2 billion from $2.1 billion.

A consensus of financial analysts polled by Thomson Financial Network had predicted earnings of 74 cents per share on revenue of $12.3 billion.

UPS, which operates its largest international air cargo sorting hub, Worldport, at Louisville International Airport, had an average daily shipping volume of 17.3 million packages per day in the fourth quarter, unchanged from the year-earlier period.

Domestic volume declined to an average of 14.9 million packages per day from 15.1 million packages a year earlier. International volume during the same period increased to 2.4 million packages per day from 2.2 million.

UPS ended 2009 with $2.1 billion in cash and short-term investments.

“UPS ended 2009 on a high note by leveraging network changes implemented throughout the year and executing flawlessly during the peak holiday shipping period,” UPS chairman and CEO Scott Davis said in a news release.

“The company demonstrated its ability to manage effectively in changing market conditions,” he said. “UPS has emerged from the worst recession in decades leaner, more focused and better positioned to take advantage of global trade.”

For the full year, UPS reported net income of $2.2 billion, or $2.14 per share, compared with $3 billion, or $2.94 per share, a year earlier.

Revenue declined to $45.3 billion from $51.5 billion.

For the full year, UPS delivered 3.8 billion packages, an average of 15.1 million per day, down from 15.5 million per day in 2008, according to the release.

UPS predicted full-year 2010 earnings in the range of $2.70 to $3.05 per share.

“Economic forecasts indicate gradual improvement as 2010 unfolds,” UPS Chief Financial Officer Kurt Kuehn said in the release. “The first quarter will be the most challenging of the year for UPS with profitability only slightly better than last year.”

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Investopedia has a great article on Amazon and its ability to build and sustain a successful business. I think there analysis is quite good. I continue to think that the company is worth buying and holding even though the current technicals indicate waiting for a bit of a rebound.

Online retailer Amazon (NASDAQ:AMZN) continues to pour it on. This online juggernaut, which now sells just about everything under the sun, reported results that continue to defy expectations. In the 2009 fourth quarter, net sales shot up by 37% on an apples-to-apples comparison. The bottom line benefited even more – up 71% in the quarter, representing 85 cents per share. For the full year, sales were up nearly 30% to $24.5 billion and net income reached $900 million, up 40%. Even more impressive is the effect on cash: free cash flow for 2009 was nearly $3 billion, more than twice the cash generated in 2008.

There is more good information in the original article so click through to read the rest.

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I picked this up over at Investopedia. This is a great article about losing money using Leveraged ETFs (Exchange-Traded Funds). While there are some investment vehicles that make sense (such as index funds) there are some that simply don’t work out once you understand them.  This is the case with leveraged funds.  Rather than re-explain the math here, I suggest that you jump over to Investopedia to read it.  Below are some hightlights:

Have you ever wondered how you can make sure that your portfolio loses money? For those of you who are tired of that extra cash weighing down your pockets and would rather just lose it aimlessly than give it to a worthy cause, I found the ideal investment: levered [sic-leveraged] exchange traded funds.
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Consider a hypothetical stock that is tracked by two double-levered [sic] ETFs, one bull, one bear. Since the debt portion of the instrument must consistently be rebalanced to ensure a proper debt-to-equity ratio, the funds track the daily performance of the stock rather than the overall annual percent change. Suppose this stock, with an initial value of $100 experiences a 25% price decline, followed by a 25% increase and then a 6.67% increase to bring its price back up to $100. A double-levered bull ETF would have a terminal value of $85 ($100*1.50*0.50*1.133) while the inverse fund would be worth only $65 ($100*0.50*1.50*0.87). This is, of course, before we factor in the management expense ratio. Essentially, despite the trend in the market, these instruments will lose value due to the daily volatility of the underlying asset.

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From CNBC’s Mad Money:

Jim Cramer (text from Newsbusters.org):

The number you need to watch is the number that Scott Brown racks up against Martha Coakley in this amazing Massachusetts Senate race. I say amazing ’cause this was supposed to be a walkover. I mean, even a few weeks ago it was a lock for Democrat Coakley. But now everything’s up in the air, and a Brown win would be devastating for the president’s agenda. Let’s put Brown, okay, and I don’t mean UPS which I happen to own for my charitable trust. Particularly on healthcare reform, because Republican Brown has said he will definitely vote against the plan.

Brown in the Senate? That wrecks the 60-vote supermajority the Democrats have been counting on. It could spell the end for this almost year-long nightmare of a piece of healthcare legislation.

What does a Brown election mean larger than this? Well, first you’re going to get a knee-jerk rally in all the so-called penalized stocks — the HMOs, the drugs, the medical device-makers. I call it “knee-jerk,” though, because these stocks have been on fire for months. Look at Cramer fave WellPoint, or United Health. 52 week high. 52 week high. Merck, 52 week high. It’s been clear as a bell that the healthcare reform wasn’t going to affect most healthcare stocks. That’s versus what we thought last year.

More important, though, I think investors who are nervous about the dictatorship of the Pelosi proletariat will feel at ease, and we could have a gigantic rally off a Coakley loss and a Brown win. It will be a signal that a more pro-business, less pro-labor government could be in front of us. Hey, would you say it is more China like perhaps? No, we can never be as capitalist as the Communist Chinese. But how about a little bit less like the old Soviet Union? Yeah, that would be a bit more like it. Pelosi politburo emasculation! Everything from the banks, which are usually in the Democrats’ penalty box, or the oils which are despised by this administration for being carbon, could be propelled dramatically higher all of this Tuesday night.