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Buying UPS

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Bought 700 UPS at 75.74.

UPS is trading on the low side of its range based on either Price/Sales or Price to 5 Year Average EPS, the reason being growth has slowed quite a bit in recent quarters.

UPS has a strong cash flow, which they have applied very effectively in expanding their sorting facilites. I think their capex has enabled them to improve their systems and efficiency which has helped support margins. They are building a hub in Shanghai which is expected to become operational in 2008 and should promote growth in China, compensating for the slower growth in the US.

Based on the company's goal of increasing EPS in a range of 6-10%, and additional growth in the China market, I look for UPS's shares to increase to the midpoint of their historical value range, 93 as I figure it, over a period of 1 to 2 years.

In the meantime, the dividend yields 2.36%.

Monday July 30, 2007 : 07:18 PM

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