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Will United Parcel Service (UPS) Be Able to Regain Lost Volume and Improve Cost Structure?

Artisan Partners, an investment management company, released its “Artisan Value Fund” first quarter 2024 investor letter.  A copy of the same can be downloaded here. The robust US economy, a general disinflation trend, and increased corporate earnings pushed the US equity markets to a new all-time high in the first quarter. The fund’s Investor Class ARTLX, Advisor Class APDLX, and Institutional Class APHLX returned 8.65%, 8.71%, and 8.71% respectively, in the first quarter compared to an 8.99% return for the Russell 1000 Value Index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.

Artisan Value Fund highlighted stocks like United Parcel Service, Inc. (NYSE:UPS), in the first quarter 2024 investor letter. United Parcel Service, Inc. (NYSE:UPS) is a package delivery company, with a market capitalization of $119.008 billion. One-month return of United Parcel Service, Inc. (NYSE:UPS) was -5.62%, and its shares lost 18.76% of their value over the last 52 weeks. On May 23, 2024, United Parcel Service, Inc. (NYSE:UPS) stock closed at $139.10 per share.

Artisan Value Fund stated the following regarding United Parcel Service, Inc. (NYSE:UPS) in its first quarter 2024 investor letter:

“United Parcel Service, Inc. (NYSE:UPS) was a Q4 2023 purchase. When we initiated our position, shares were under pressure due to concerns about its new labor contract diverting volumes and driving up costs, as well as the continued normalization of volumes following COVID-related gains. The stock moved higher after we purchased it but gave up those gains in January when the company reported weaker-than-expected shipping volumes and a decline in revenue in the prior quarter. Despite the long-term growth tailwinds from the secular shift toward e-commerce, the shipping business is still cyclical, so disappointments will happen. However, we welcomed the market’s short-term focus as it provided us an opportunity to purchase UPS at an undemanding valuation of less than 11X our view of normalized earnings. UPS is a good transport operation that easily earns its cost of capital, generates significant free cash, has a wide economic moat, has a strong financial profile and pays an attractive dividend yielding 4%. With the new 5-year labor agreement completed, we believe UPS can focus on regaining lost volume and improving its cost structure.”

A warehouse filled with boxes of parcels, symbolizing the companies reliable logistics services.

United Parcel Service, Inc.’s (NYSE:UPS) trailing 12 months revenue is $89.74 billion. In the first quarter, United Parcel Service, Inc. (NYSE:UPS) reported consolidated revenue of $21.7 billion, a 5.3% decrease compared to first quarter of 2023.

United Parcel Service, Inc. (NYSE:UPS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held United Parcel Service, Inc. (NYSE:UPS) at the end of the first quarter which was 46 in the previous quarter.

In another article, we discussed United Parcel Service, Inc. (NYSE:UPS) and shared the list of best quality dividend stocks to buy according to Reddit. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

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In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

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