Shorts Are Piling Into These Stocks. Should You Be Worried? – The McGraw-Hill Companies, Inc. (MHP), United Parcel Service, Inc. (UPS)

What can brown do for you?
The shipping and logistics sector has been incredibly hit-or-miss for the past year as Europe’s austerity woes, China’s slowing growth, and the threat of budget cuts and higher taxes in the U.S. have many rethinking whether they can trade down from premium overnight shipping to less costly and lower-margin ground or two-to-three-day shipping services. FedEx Corporation (NYSE:FDX) confirmed these struggles in its second-quarter results in December, when it reported a worrisome 5% decline in domestic express service and a 2% retracement in international express orders.

United Parcel Service , Inc. (NYSE:UPS), or UPS, appears to share the same sentiment as FedEx that the global environment is tough, but it delivered markedly better results than FedEx when it reported its fourth-quarter results in late January. Consolidated global package volume per day actually grew 2.7% for the quarter and that was including the negative effects of Hurricane Sandy in the U.S. All told, UPS reconfirmed its commitment to shareholders by boosting its share repurchase guidance from $1.5 billion to $4 billion and forecast EPS growth of 6% to 12% despite negative ongoing currency translations and higher pension expenses.

The way I look at United Parcel Service , Inc. (NYSE:UPS) is that if it can perform this well in a stagnant growth environment, just imagine how inexpensive it’ll appear when package growth returns to around 5% in a modest global growth scenario.

Foolish roundup
This week I’ve come to the conclusion that short-sellers are barking up the wrong tree. Emotional trading and long-term trends appear to be working against them in all three instances.

What’s your take on these three stocks? Do the short-sellers have these stocks pegged, or are they blowing smoke? Share your thoughts in the comments section below.

The article Shorts Are Piling Into These Stocks. Should You Be Worried? originally appeared on Fool.com and is written by Sean Williams.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Moody’s, Google, FedEx, and United Parcel Service.

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