June 8, 2023
Top 10 Stock UPS Sell Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: UPS – Top 10 Stock in Low Waste Leaders
UPS is listed as a top 10 stock on June 08, 2023 in the market index Low Waste because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 23 (23% performer), Obermatt issues an overall sell recommendation for UPS on June 08, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Air Freight & Logistics |
| Index | Dividends USA, Energy Efficient, Low Waste, Recycling, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment UPS Sell
| 360 METRICS | June 8, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 38 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 60 |
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| SENTIMENT | ||||||||
| SENTIMENT | 40 |
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| 360° VIEW | ||||||||
| 360° VIEW | 23 |
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ANALYSIS: With an Obermatt 360° View of 23 (better than 23% compared with alternatives), overall professional sentiment and engagement for the stock UPS are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for UPS. The only rank that is above average is the consolidated Safety Rank at 60, which means that the company has a financing structure that is safer than those of 60% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 38, which means that the share price of UPS is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 33, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 40, which means that professional investors are more pessimistic about the stock than for 60% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a 360° View of 23, UPS is worse than 77% of all alternative stock investment opportunities based on the Obermatt Method. This means that UPS shares are on the riskier side for investors. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 40. The negative market view on UPS may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for UPS only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 40 (better than 40% compared with alternatives), overall professional sentiment and engagement for the stock UPS is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for UPS. Analyst Opinions are at a rank of 56 (better than 56% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 56, which means that currently, professional investors hold more stock in this company than in 56% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 53 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 53% of competitors). But Analyst Opinions Change has a below-average rank of 7, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in UPS. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 40 (less encouraging than 60% compared with investment alternatives), UPS has a reputation among professional investors that is below that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: UPS Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 38 (worse than 62% compared with alternatives), UPS shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for UPS. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 96% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 23 which means that the stock price compared with what market professionals expect for future profits is higher than 77% of comparable companies, indicating a low value concerning UPS's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 45 which means that the stock price compared with what market professionals expect for future profit levels is higher than 55% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 8 is also low. Compared with invested capital, the stock price is higher than for 92% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 38, is a HOLD recommendation based on UPS's stock price compared with the company's operational size and dividend yields. Should dividend investors pick UPS? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose UPS only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: UPS Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), UPS shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for UPS. Sales Growth has a rank of 39, which means that currently professionals expect the company to grow less than 61% of its competitors. The same is valid for Profit Growth, with a rank of 48, and Capital Growth with 49. In addition, Stock Returns have a below market rank of 49, which means that the stock returns have recently been below 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a HOLD recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: UPS Debt Financing Safety above-average
| SAFETY METRICS | June 8, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 42 |
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| REFINANCING | ||||||||
| REFINANCING | 54 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 71 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 60 |
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ANALYSIS: With an Obermatt Safety Rank of 60 (better than 60% compared with alternatives), the company UPS has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of UPS is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for UPS. Refinancing is at 54, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 54% of its competitors. Liquidity is also good at 71, meaning the company generates more profit to service its debt than 71% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 42, which means the company has an above-average debt-to-equity ratio. It has more debt than 58% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 60 (better than 60% compared with alternatives), UPS has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and UPS could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: UPS Below-Average Financial Performance
| COMBINED PERFORMANCE | June 8, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 38 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 71 |
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| COMBINED | ||||||||
| COMBINED | 28 |
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ANALYSIS: With an Obermatt Combined Rank of 28 (worse than 72% compared with investment alternatives), UPS (Air Freight & Logistics, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of UPS are low in value (priced high) with a consolidated Obermatt Value Rank of 38 (worse than 62% of alternatives) and show below-average growth (Growth Rank of 33) but are safely financed (Safety Rank of 60), which means low debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 28, is a hold recommendation based on UPS's financial characteristics. As the company UPS's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 38) and low growth (Obermatt Growth Rank of 33), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 60) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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