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Tickers in this Article: UPS, FDX, AXP, MA
As this country becomes more and more populated, the odds are pretty good that the number of packages being shipped will increase. From a big picture perspective, that's why I like the long-term chances of United Parcel Service (NYSE:UPS). That same reason makes me bullish about FedEx's (NYSE:FDX) long-haul prospects as well. The holiday season is right around the corner and some think these companies are poised to do brisk business, but I don't think it makes sense to get into the stock right now.

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Why The Package Shouldn't Be Opened
While that big picture outlook mentioned above is appealing, UPS has a mixed record this past year as far as meeting analyst expectations is concerned. It met expectations once, missed twice and beat once. A few more quarters of beating expectations would make me feel a lot more upbeat about getting involved.

UPS trades at about 26.7 times this year's estimate and at roughly 21.6 times the 2010 estimate. That's in the ballpark of FedEx, which trades at about 25.8 times this year's estimate, and roughly 18.9 times next year's estimate. But at the end of the day it's just too expensive to get involved. (For further reading, check out Understanding The P/E Ratio.)

As far as the holiday season is concerned, there could certainly be a seasonal pickup in demand for shipping. But any bump up could be short-lived as a result of the still sluggish economy and malaise on Main Street.

It's also worth looking at the solid run the company has had since earlier in the year. While great for shareholders at the time, we could see some profit taking in the near-term.

Keep An Eye Open
The company is expected to release its third-quarter numbers on the 22nd of this month. Analysts are expecting the company to earn 52 cents a share. It's unclear whether the company will be able to hit or beat that number. What I am more interested in is what management will say about its expectations for the next few quarters and its outlook for earnings and the economy. Management's comments may dictate how the shares trade in the very near-term. (For more, check out Earnings Forecasts: A Primer.)

Alternatives For The Holidays
American Express (NYSE:AXP) is worth a closer look given that the holidays are near and cash-strapped consumers will be looking to buy gifts with credit cards. It trades at more than 30 times this year's estimate. Then again, there could be some upside to the estimates that are out there in the back half of the year. The company is due to release its third-quarter number later this month.

There could also be some near-term upside to Mastercard (NYSE:MA) for similar reasons. It trades at a slightly cheaper 20.5 times this year's estimate and it's expected to grow at about 17.9% from this year to next year. (For related reading, check out Investing In Credit Card Companies.)

The Bottom Line
I like UPS's prospects in the longer term but at this point it might be worth waiting to see if the stock pulls back. It hasn't done a great job of meeting expectations this past year. It also trades at too lofty a price-to-expected earnings multiple for me.

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