11-20-2008Well Cramer sure called the stock accurately in 2006. Now he is very bullish on UPS. I've been buying as much as I can with the stock purchase program.
We'll see...
FCC Says Yes (Finally) - Cramer's Mad Money (7/28/08) - Seeking Alpha
Happier Days Ahead: United Parcel Service (UPS)
“Happier days could be here again with the price of gasoline continuing to fall,” Cramer told viewers. He reiterated his price target of $3.50 a gallon for gasoline and said that the stock of United Parcel Service is one way to play cheaper gas. Cramer has been bearish on UPS since October 2006, when he recommended selling the stock at $76.05 a share. Since then, shares have fallen 19%, and Cramer would buy given the expected low gas prices. “It's time to become a United Parcel bull,” he said. Cramer said when the company reported last Tuesday and cut guidance from $3.90 a share to $4.20 a share to $3.50 a share to $3.70 a share, the stock rebounded 4.4%, signaling the arrival of the bottom. The stock has already been through the meat grinder, said Cramer, noting that Wall Street was clearly expecting even worse numbers from the company. Cramer is not predicting a rebound in shipping, but instead he likes UPS simply because of the decline in gas prices. With fuel costs up 67%, UPS has much to gain from lower gas prices, Cramer said. The company's outlook sees oil at $149 a barrel, so any decrease in that number goes straight to the bottom line, he said. In addition UPS has put in place a hiring freeze further lowering costs and has negotiated a new contract with its union to save an estimated $640 million over five years. It has a 10 year contract with DHL. Cramer said he also likes the company's 2.9% dividend yield and its history of aggressive stock buybacks. Cramer said in difficult times, he looks for smart companies, and UPS is one of the most pro shareholder companies around.
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