Investing in a single company

Posted on October 5, 2005 , filed under Stocks | Print This Post

What would you choose if you could only invest in one stock for one year? I’ll tell you what I would do. I’d pick between these two stocks, UPS, United Parcel Service Inc. or FDX, FedEx Corporation.

Here’s why:

Both companies perform vital services that almost every business uses.

Both companies have built solid businesses in no imminent or foreseeable danger of going out of business.

Both companies pass the high price of oil to their customers in the form of fuel surcharges.

Both companies are trading near their one year lows.

I would go so far as saying, if someone were to buy either UPS or FDX, they would likely make 10-15% a year from now. The risk comes from companies who will reduce shipments due to the high price of fuel. This really isn’t much of a risk though since I don’t see viable alternatives. It’s inevitable that oil will drop in price. On a quick glance, both stocks appear to be a clear value to me and one of them would be my sole pick to hold onto for a year.

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