Special Situation Investing

Thursday, February 08, 2007

Incremental Update

United Parcel Service (UPS) announced plans to increase it's quarterly dividend by 4 cents (~10%) to .42, and upped it's buyback limit to $2 billion. For reference, the company currently has a market cap of ~$78 Billion, and a share price at $73.33. I purchased shares in UPS about a week ago.

Philip Morris, majority owned by Altria (MO) increased the price of certain cartons of cigarrettes by $1.99 today. Also today, competitor Reynolds American (RAI) saw a slip in earnings as excessive shipments in the previous quarter and higher promotional expenses cut into profits. After the slip, Reynolds trades at 15.3 times past earnings. This is very comparable to MO's current valuation, post-Kraft. Excellent article over here, with the goods on Altria's future prospects.


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