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UPS to Deliver in Fourth Quarter

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At a little more than 22 times the 2010 estimate, it's probably approaching fair value.

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Asian stocks rose overnight. The Hang Seng and the Nikkei were up 0.51% and 1.09%, respectively. European stocks were in positive territory, too, early this morning. And here in the US, we're currently trading lower.

Here's what I'm focused on this fine Monday morning:

UPS (UPS):
Looks like it's going to deliver in the fourth quarter.

Per the release on Friday: "UPS today announced that it expects to exceed its previously announced estimate for fourth-quarter 2009 earnings, now anticipating a range of $0.73 to $0.75 per diluted share. The company previously projected earnings of $0.58 to $0.65 per diluted share for this period."

My feel:

1.
The stock has had a decent run and I still think it can go even higher from here, but how much is unclear to me. At a little more than 22 times the 2010 estimate, it's probably approaching fair value.

2. I'd be more excited if it were to pull back to around the mid $50s. Some insider buying in the open market here in 2010 would also be nice to see.

Best Buy (BBY):
Looks like the electronics chain took a hit on some volume on Friday.

In case you missed it, the company was out with its revenue numbers for the month of December and it sure seemed solid. Its comps were up 8.2%. However, some folks seem to have their undergarments in a bunch because the company didn't up its outlook for 2010.

My two cents:

1. I see opportunity here. In the grand scheme of things, it remains the big cheese in this space and the only true one-stop shop for super cool computers, appliances, cameras, and other gadgets that I routinely struggle to operate but my kids can figure out with ease.

2. If it puts $3.11 on the board this year and $3.33 a share next year like analysts are calling for, the shares have the potential to see the high $40s or low $50s.

3.
The company has a pretty good track record of coming in better than expected, so I wouldn't be surprised if it does so again.

Walt Disney (DIS)
Justin Sharon points out today in Upgrades & Downgrades: Disney Gets Knocked Down that Disney was downgraded by Janney Montgomery to Neutral

I, for one, continue to like this stock. Keep in mind that Mickey Mouse & Co. are still expected to kick off some fine earnings, despite the still-languishing economy in the US and the lackluster conditions around the world. The company has also been beating EPS expectations pretty consistently, and that shouldn't be taken lightly. I suspect that park attendance could be more robust in 2010.

In a nutshell, I don't agree with the rating.

Rick's Cabaret (RICK)
Brean Murray slapped a Buy rating on the adult nightclub chain.

I like this business -- or rather I like what I've heard about it (wink wink). I also think Rick's has ample room for growth over the next several years, and believe the shares could have some legs. But I wouldn't chase it too far; I'd probably want to take a look under $13.

Have a great day!
No positions in stocks mentioned.

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