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Abstract of Outcomes: Tesla, Nucor, Enphase, and UPS – Motley Idiot

The yield season is in full swing! In this episode of Industry Focus: Energy, host Nick Sciple and Motley Fool employee Jason Hall share their thoughts on earnings reports from Enphase (NASDAQ: ENPH), Tesla (NASDAQ: TSLA), Nucor (NYSE: NUE), and UPS (NYSE: UPS). The two also discuss which stocks they would buy today and why.

Check out our Podcast Center for all episodes of all of The Motley Fool's free podcasts. For information on investing in stocks, please see our quick guide to investing in stocks. A full transcript follows the video.

This video was recorded on April 29, 2021.

Nick Sciple: Welcome to Industry Focus. I am Nick Sciple. Jason Hall is coming to me this week to review the latest earnings in the energy and industrial sectors. Jason, thank you for coming to see me.

Jason Hall: Nick thank you for having me. I'm excited. We are deeply into the earnings season and as expected, many companies will be doing reasonably well once we start getting into recovery trading. Isn't that the reopening of trade?

Student: Absolutely. I drew a statistic this morning. Carl Kingston, a CNBC anchor, a great follower on Twitter. He cleared the statistics this morning. We're roughly in the middle of the winning season. If you look at earnings for S&P 500 companies, we're well on our way to delivering the strongest EPS growth since Q1 2010 of 45% year over year. This goes for the S&P 500. Obviously it's an odd time we're looking at the profits, but the pandemic is coming to an end. But what do you think of how strong earnings have been across the board this quarter?

Hall: Yeah, that's interesting. We have a couple of factors. # 1, as we mentioned earlier, is like 2010 when the world gradually emerged from the lows of economic impact after the end of the global financial crisis and now, of course, a reopening is taking place. I wouldn't be sure if I didn't go into the events in India and some other countries that are just overwhelmed by the coronavirus crisis, but at the same time there is vaccination going on here in the US and people are going back to work. But it still gives the tailwind of federal incentives, that's part of the story too.

Student: Absolutely. Yes, relaxation as well as suggestions and people just feel more comfortable when they spend money. Maybe they can see the light at the end of the tunnel, something like that. But let's take a broad look at some of these earnings reports. What we will see are companies producing record results. The market reaction to these reports has varied. The first company we're going to talk about here is Enphase Energy. They reported record results earlier this week, but the stock fell over 10% on Wednesday. Jason, what's going on here?

Hall: Well, it's a case where the market is always looking ahead. If you dig a little beyond the record results and revenue and the company says yes, we may have a little problem. Our guide turns out to be a little less than what Wall Street analysts say. Then they say something like, we're going to have trouble getting this really important component, and we're not going to be able to make enough of our products. You get this reaction when the stock has fallen. This is one of those cases where Enphase is hit by the same thing as ford and GM and big car is, and that's the semiconductor crash.

Student: Absolutely. Yes, you drew a quote from Enphase President and CEO that said, "Looking into the second quarter, our shipping volume will be limited by the availability of semiconductor components. Although solar microinverter capacity is increasing quarterly and demand is increasing The supply cannot keep pace with the demand due to semiconductor and component restrictions in the marketplace. "As a result, they expect their growth to slow, revenue for the quarter to grow 47% year-over-year and a gross profit margin of 40% %. Those are big numbers. But in the context of forward growth, which is going to slow down a bit because business is doing so well, they exceed what those supplies can do, and the stock has just had an incredible run over the past year, Jason.

Hall: Yes it did and it's a company that I love. Not sure if it is recommended on Motley Fool services, but it is certainly very loved by a lot of people like me because it provides a critical part. It makes the components that solar work. It's the thing that takes solar energy from a solar panel and converts it to AC power so that it can then work on the grid and power our homes and factories and all of those things. It's a really interesting business. As we've seen this year, almost everything renewable energy has done incredibly well. It just so happens that this is great business, it's important business. They are in a duopoly with North America SolarEdge This panel-level electronics is really suitable for decentralized solar energy. You think of commercial solar roofs on a Walmart or in your home or in a parking garage that is being distributed. It is not about the large supply systems, but rather the distributed solar system between Enphase and SolarEdge. You have + 90% of that market and it's a growing market so it's huge. The company has certainly been rewarded for its growth. But here, too, there are many hopes that are currently being priced into the stock.

Student: Yes Jason, I believe you own this stock.

Hall: Yes that's true.

Student: How do you react to this result, how do you assess the prospects for the company that will continue to develop after this result?

Hall: Two things. If you think about the short term situation because this is a major supplier, the North American market will come under real pressure at first as someone else is in business too. But how do these companies get preferential contracts, exclusive contracts for manufacturers, or maybe they are the main supplier to a large solar installer? These things help. But the challenge I think will be international for Enphase. It's really focused on growing its international business and has done pretty well there. The thing is, many other markets don't have the same requirements as the US electrical code which requires energy management to be done on every solar panel and on every solar distributed. This means that internationally other providers may step in front of the company, which could have a little influence on the international growth story. This is a concern I have in the near future.

In the long run, I continue to have great faith in the company, which has incredible management, has great technology, has invested in improving that technology, and is looking for ways to diversify the business into other areas that I have chosen to do these Panels only as a supplier because we are honest. Typically, when you are a supplier you are a middleman and you are not making the end products. Sometimes you are the one who gets squeezed around the edges. This company has proven that as a supplier it can really generate very good margins. This could affect their ability to do so, but again, they are focusing on diversifying their business a bit, getting more into energy storage, and I think that will help the story play out over time . The addressable market is just so gigantic that I think the tailwind will be bigger than the pressures the company is grappling with.

Student: Something to keep watching. If the company is able to continue executing and delivering the numbers it came up with last quarter, it will likely catch up with any market concerns. We mentioned Enphase's investment in solar energy. You also have some investment in stationary storage and are now moving to another company that is making some investments in this area as well. Tesla reported profits this week. As with any Tesla earnings report, there are many things for people who have been optimistic about the company. What did you do with the report?

Hall: I think if you just take all the noise, take all the bitcoin stuff, take all the metrics on how they sell the energy loans, the terms here just got out of my head for the way they are.

Student: Regulatory Loans.

Hall: The regulatory credits. When you just take all that stuff and completely separate it and focus on that one thing, it's really hard to argue against it. Tesla sold 50% more cars than the year-ago quarter, 50% more cars, and they basically zeroed out their high-end Model S, Model X cars. There's a little bit of contention there about this actual commercial production. But we know they turned that off because they are releasing and upgrading new models. But for me it's incredible, it's absolutely incredible. That tells a really important story about how disruptive Tesla was and how badly they came across something that car buyers dearly want.

Student: Law. To name a few numbers, Tesla achieved record production shipments for the first time and exceeded $ 1 billion in non-GAAP net income for the first time. That's a direct quote from us on the results conference call earlier this week. You see significant increases in deliveries. They also reiterated the forecast of the annual growth rate for deliveries, which will be 50% in the future. There is something to consider because, as Tesla achieved that 50% growth this year, it opened a new factory in China. Now that the snowball is rolling downhill there, they have plans for the new factory in Austin and the other factory in Germany, and things are really starting to accelerate to maintain that rate of growth and keep delivering more vehicles.

If you look at these headings, it's really impressive. What different people might highlight is on the profitability side only, you see incredible amounts of growth. If you want to experience a waterfall, start with the operating results and withdraw the regulatory credits and withdraw the bitcoin trading profits. Operating income of $ 594 million for the quarter, up 110% year over year, sold $ 518 million in regulatory credit, 100% margin revenue, not from selling the cars, and then another $ 101 million Bitcoin trading profits, allowing you to earn up to $ 619 million in regulatory credit and bitcoin trading profits compared to $ 594 million in operating profit. What is telling you that you are people you want to be critical of the report is that if you pull back on some of those non-core pieces of business that may be less repeatable in the future, things like bitcoin trading and regulatory Sales that the core business is still not dependent on profitability.

That said, if the scope goes up and the costs go down, we may see that at some point in the future. In terms of core profits, there is still some progress to be made in my opinion, but if you look at shipments, sooner or later they will catch up if they continue this way.

Hall: Yes, you think so. Again, I'm not arguing about talking about these things because it really matters. If you want to be very cynical, you can say this is just evidence that companies can manipulate GAAP to get you the result they think they need to deliver. Maybe that's true. With the Bitcoin thing, yes. It is what it is. It certainly shouldn't be a central part of a business's revenue stream that really isn't into investing and dealing with cryptocurrencies. So you are thinking of a coin base. This is not their business, it is a thing that they do now. But I'd say when it comes to the regulatory credits, Nick, and I've thought about it a lot because I was one of those people who said, "Oh, that's not a thing." Someone paid $ 518 million for it. You know what? I promise you there are some people out there who are worth more than $ 518 million to give this money to Tesla. Maybe it's not a tangible thing. Sure, you can say that the government is involved. However, if you want to spend it there is some economic value there. Tesla was smart enough and smart enough to use it as part of the economics of building scale. You take advantage of that. You know what? I think that's a smart approach because it would be ridiculous to ignore it. He is there. You know who didn't take advantage of it well? Big car. It was there. Nick.

Student: Yeah, I think that's a fair point. When you think about who is paying Tesla that $ 518 million, they tend to be automakers who have to meet whatever demands they have to make on emissions. Buy loans to meet these requirements. In 2020 in particular, European regulations were enacted, which significantly increased the sanctions. It makes sense for automakers to buy these regulatory credits from Tesla rather than paying the government fines. I think people could push back and say this is certainly an opportunity for Tesla, but as other automakers keep moving to electric vehicles. For example, let's say they need to spend X to buy a regulatory loan from Tesla to meet government emissions requirements. If you can sell an electric vehicle for X minus a dollar even if you lose X minus a dollar, it makes good business sense to bring that vehicle to market.

The incentives for the people who buy the loans are that to the extent that they can avoid borrowing and lose less money by selling a vehicle at a loss, they will attract those people to the market. As long as Tesla can sell these, it's obviously an incredibly high-margin material that they can use to maintain their advantage in electric vehicles while these other people plan to catch up. But it is one of those things that the tailwinds of regulatory credit fade at the same time as competition headwinds emerge in the marketplace. Competition will only get tougher and that's part of it. If we look forward to the company, what are your biggest things Tesla will look out for in the future? What should people watch out for?

Hall: I've been saying this on the air a few times lately and I really think this has to be the focus. When you think of China, it's such an important market for Tesla. At the same time, there are some real questions about where the Chinese government will be and how Tesla can grow at the same rates of growth. Because there are many – I did a show with Anand Chokkavelu and Matt Frankel on Fool Live yesterday. We looked at a dozen companies. Out of that dozen, the four of us thought we were the next Tesla in China. (laughs) There is so much focus domestically. Let's be honest, China has put its thumb on the scales in the past. You think of the GMs and Fords that have had success at times, and then the success of the business in China has dried up. I think it's going to be a really challenging market, and I think investors should really moderate their expectations about the company's ability to thrive in a market where its destiny may be predetermined. Maybe I'm saying this pretty persistently, but I think that might be the case. The US, North America, Europe, I think these are the markets that are becoming increasingly important because the company in China may not be allowed to be as important as it would like to be. Am I persistent there?

Student: If you're careful, check out outlets like the Global Times and a few others in China. There has certainly been an acceleration in inflammatory headlines that aren't necessarily the most charitable for Tesla.

Hall: Basically, I come from the state media, that's all media.

Student: Yes. That is certainly something to watch out for. I would also pay attention to that. The other thing I would say is just autonomy because that's a key differentiator for Tesla. A key aspect of the business when it comes to above average margins is the auto industry, which is evolving. For the past few weeks and months, a few automakers have been talking about introducing similar products to the market. Tesla needs to be able to push this functionality further in order to stay ahead and give consumers the image that they have the best autonomous technology currently available in the market. That's something to see, there has also been some regulatory activity. I think the China story and the extent to which autonomy technology is advancing are two very important things to look out for at Tesla. Any final thoughts on Tesla, Jason?

Hall: Yes, I agree to some degree of autonomy. I think they really have a huge data head start there in terms of the information they have gathered. But again, I think it's this story that they don't necessarily have in complete control of their fate. I mean, you can say anything you want about your technology. But at the end of the day (laughs) the supervisory authorities will call when this is really ready to drive. I'm one of those who think it's going to take longer than most of us expect. There are a ton of reviews out there based on the fact that, as you said, Tesla has those above-average margins in the auto manufacturing business because of transportation as a service. We'll see how it turns out.

Student: To see something. Moving away from Tesla and Enphase, these are companies where we are really in the spotlight of the hot sectors in 2020. Let's get to a few companies, perhaps less outside of these sectors. One of them is Nucor Steel, the largest steel manufacturer in North America. You can't build a Tesla without steel. This is another company that is posting record quarterly results.

Hall: If you look at the metrics, Nucor reported double-digit volume growth. Steel prices rose by more than 20%. If you're a steel maker, especially one of those heavy industries, and you can get double-digit prices and also get double-digit quantities, the operational leverage you get and the extra margins you get on the bottom line are huge. We saw that Nucor's sales were up 30% in the quarter, 33%.

Student: 33% consecutively, 25% compared to the previous year.

Hall: It's huge. If you look at the bottom line, this is a great way to generate income.

Student: Absolutely. When you look at these steel companies, the volume, you slide your way through the system. There is some operational leverage that is recognized when demand increases.

Hall: Yeah, it's huge. I think the shipments to outside customers, so they are actual steel shipments that they sold to someone who doesn't belong from one division to another, increased 10% to 11%. Total shipments increased sequentially by 13%. I think the serial numbers are really important because you can see where the demand is increasing. The industrial demand for steel begins to increase. There is another part of it that is important to Nucor. This is a company that has such a good track record of capital allocation because the company has a solid investment grade balance sheet. One of the things that they have done really, really well is that their model, their electric car stoves, their mini mills offer some scalability in their cost structure. But even having a solid balance sheet means that when this steel cycle goes negative and we are in a downturn and all of these assets are for sale, you can buy someone who is in trouble. He has something he must sell in order to raise capital you can buy at attractive prices.

What we've seen over the past two or three years is that these things were being sold for a premium, so the company really focused on in-house projects and greenfield development and construction instead of buying. It really, really paid off because the company has moved more to high-end steel, to steel where it can get higher margins, to steel where it doesn't have to fight so much against raw material importers, to steel, at which demand is growing, such as the auto industry has higher quality, lighter, stronger steels and household energy. Places where there are better margins, better demand and better tailwind. It really, really, really pays off.

Student: Speaking of tailwind, Leon Topalian, President and CEO of Nucor, said one of the quotations from the conference call: "If you look at the forecast for the future, we expect earnings for the second quarter of 2021 to exceed our first quarter . " Results and set a new record for quarterly results. We believe that the current favorable demand environment will continue until the end of 2021. "Jason, you mentioned that steel is a cyclical industry. Is it safe to say that the cycle is emerging?

Hall: It is. Here, too, the steel industry was relatively strong before the coronavirus pandemic. Just nailed everything. Again, think of the US domestic steel for energy, which was on the rise. The problem has been the import of steel, which has hit demand badly and has made it more difficult for many domestic steelmakers over the past five to six years. But now infrastructure is the big thing we're talking about again. It is clear that infrastructure investments need to be made.

But we also believe that a recovery in the domestic energy industry will boost demand for steel, so the metrics are good and you will go beyond Nucor to just briefly dwell on that Steel dynamics (NASDAQ: STLD), ticker STLD, is a really similar, smaller, newer company that shares the same mini-mill business. You look at their metrics and see a lot of the exact same things. The volume rises, the operating income rises, the prices rise. It lags behind and also presses on the bottom line. It's tough, I'm challenged right now, because these stocks are trading at all-time highs. But then you look at their forward earnings multiples and they are in the high single digits like the seven and eight times forward earnings multiplier. I think the steel cycle is in a very, very strong place right now.

Student: Yes. I think we already talked about this on the podcast for these cyclical companies when it comes to investing through the cycle. What do you think about the right time to buy them? Is now a good time to buy them, or was it really before the cycle?

Hall: So it's a challenge. Nucor and Steel Dynamics have only risen 50% since the beginning of the year. Obviously, a lot of people think that the infrastructure bill is going to happen and there is going to be a big expense here. People are going to buy cars again, all of those things. To some extent, I think it's "priced in". But the way I feel about these deals, unless you have an opportunity like the one we saw in March and April, both stocks have doubled since then. These are occasions when you get it once a decade you go in and top up and buy a lot because they are high quality companies and you know they will eventually bounce back. The way I think about them now is, in my opinion, a very reasonable thing for investors to do, maybe take a very small position or think about adding a little more now and then further understanding and increasing of the steel industry and economy monitor aspects of demand that are playing out and then look for opportunities to add and grow a position over time.

Another thing is that they both pay dividends that add up to almost two%. So if you're looking for a stable, dependable source of income that can grow over time because they've also had really good results in increasing their quarterly payouts, I think they'll do well for that dividend growth. I definitely think now would be a probably not ideal time to start a large position in them. Another 50% increase in four months, I think that says a lot about the potential risk of short-term volatility and the risk of underperformance over the next three to five years if your goal is to outperform the S&P 500.

Student: Certainly. It's going to be cyclical business, keep that in mind. But I think we both agree that the long-term development of Nucor, its role in the US economy and the North American economy will not decrease significantly in the future. To the extent that they can continue to make compelling capital allocation decisions and we can't find anything to replace steel, I think the company can play a role and be part of a balanced portfolio going forward.

Let's get to the last company we'd like to talk about today: Jason, UPS, another company reporting record results, and another company blowing up analyst estimates. What do you think of the UPS report?

Hall: If you think about what happened in the last year, you have hundreds and hundreds of millions of people in the United States and billions of people around the world who have learned that you can get anything straight to the market (laughs) on the Internet. It's right there. You can buy stuff and it will show up in your house. It could be a couch, it could be anything So this trend is absolutely paying off, vaccine distribution. There are so many interesting things that drive companies like UPS. Their volume increased by about 14%. Incredible.

Student: Increase in average daily volume by 14%. Adjusted earnings reached $ 2.77 per share. This contradicts analyst estimates at $ 1.73. So if you are absent by $ 1.

Hall: This is better than the last I heard.

Student: That is much. Sales increased by 27% compared to the previous year. Profits in their domestic and international segments have both hit record levels. Significant increase in small and medium-sized companies. The growth reached a record high of 36%. So people across the board are shipping a lot of stuff. There has been this inflection to e-commerce that will not be reversed, so companies that may have long hesitated to sell products online have had to take advantage of this to a significant extent, which has benefited UPS. I think there has been a lot of talk in the market about what will happen when Amazon gets into logistics and they will be UPS and FedEx. I think we're learning that there is a hell of a lot of demand and that all of these people can make a lot of money.

Hall: We are talking about Amazon and then you think of a company like Shopify This has established itself as a way for people to sell their products online and develop an ecommerce strategy that is part of their trading strategy, and they are not married to who could possibly be their biggest competition. Then think of companies like Wix. So all companies that use the other side of the online experience and then connect with e-commerce. If you're a company like Shopify and you believe in its future, you can't really believe that Amazon will put UPS out of business. It's a big world and there will be hundreds of millions of companies around the world shipping goods. This is like the golden age of being UPS or FedEx now.

Student: Absolutely. Das Letzte, was meiner Meinung nach aus dem Ergebnisbericht für mich hervorgegangen ist, ist ein Zitat aus dem Ergebnis, in dem es heißt: "Angesichts der anhaltenden wirtschaftlichen Unsicherheit bietet das Unternehmen keine Umsatzprognose für 2021 oder eine verwässerte Prognose für das Ergebnis je Aktie." Warum ist mir das aufgefallen? Weil wir dies vor einem Jahr in vielen Gewinnberichten gesehen haben. Die Idee war die wirtschaftliche Unsicherheit, dass wir nicht wissen, wie schlecht die Wirtschaft werden wird. Deshalb geben wir Ihnen keine Anleitung. Meine Interpretation dieses Satzes von UPS ist, dass wir nicht wissen, wie gut die Wirtschaft werden wird.

Halle: Wie gut die Wirtschaft sein wird.

Schüler: Wir werden Ihnen also keine Anleitung geben. Das sagt dir etwas.

Halle: Ja das tut es. Das tut es absolut. Ich denke, es ist auch eine Erinnerung daran, dass UPS im Inland groß ist, aber es ist auch ein großes internationales Geschäft. Es gibt einige Unsicherheiten nach unten. Es gibt. Aber ich denke, dies ist ein klarer Fall von dem, was wir gerade berichtet haben. Wir haben gerade die Analystenschätzungen um 70% umgehauen. Da sind wir also. Ich denke, es geht wieder auf alle wirtschaftlichen Trends zurück. Sie haben eine wirtschaftliche Erholung, die auf der ganzen Welt stattfindet, Sie haben eine Rückkehr zur Normalität. Ich denke also nicht, dass wir das so sehr ausschließen können, wie wir über E-Commerce sprechen und über die Dinge, die in Zukunft eine große Rolle spielen werden. Wir sprechen nur über das normale Geschäft, das gestört wurde und diese Art der Normalisierung, wenn wir in das zweite und dritte Quartal des Jahres kommen. Richtig, Nick?

Schüler: Entschuldigung, mein Computer ist hier für eine Sekunde ausgefallen, also habe ich ein paar Sekunden von dem verloren, was Sie gesagt haben.

Halle: Hey, Nick, ich sage dir, wenn du jemals jemanden brauchst, um etwas Sendezeit zu füllen, kannst du dich auf mich verlassen.

Schüler: Du bist mein Mann. Ich würde sagen, dieser Bericht von UPS sagt mir, dass die Wirtschaft mit einer unglaublichen Geschwindigkeit wächst und die Leute, die dies ermöglichen, auf übergroße Weise davon profitieren. Ich habe heute Morgen eine Schlagzeile gesehen, sie erwarten, dass das BIP in diesem Quartal gegenüber dem Vorjahr um 6% wachsen wird. Ich weiß nicht, wie das für die Leute, die diesen Handel erleichtern, kein großer Gewinn sein kann, egal ob sie bei einer UPS, einer FedEx oder einer Eisenbahn sind, oder wir haben Nucor Steel bereits erwähnt. Diese Forderung nach immer mehr Bauarbeiten. Ich denke, all diese Leute, die zum Wachstum der Realwirtschaft beitragen, haben einen enormen Rückenwind hinter sich und sie werden ein wirklich starkes Jahr haben. Ich dachte in diesem Jahr, dass Value-Aktien Wachstumsaktien übertreffen würden. Ein Teil davon sind viele Unternehmen wie UPS und Nucor, die zu dieser wirtschaftlichen Erholung in der realen Welt beitragen. Letztes Jahr haben wir gesehen, dass die Leute, die das Geschäft in der virtuellen Welt erleichtern, wirklich davon profitieren und viel Wind im Rücken haben, und ich denke, dieses Jahr gibt es viel mehr Wind im Rücken als in anderen Gruppen.

Halle: Die wahrscheinlich größte Statistik, die mir aus dem UPS-Bericht aufgefallen ist, ich weiß nicht, ob wir sie hier beenden wollen, ist, dass ihr kleines und mittleres Geschäftsvolumen schneller wächst als ihr großes Kundenvolumen. Das sind drei Viertel in Folge und es ist der größte Teil ihres Volumens, den es je gab. Das sagt viel darüber aus, wo die Wirtschaft in den USA wächst. Sie denken an die kleinen und mittleren Unternehmen, das ist der Beschäftigungsmotor, das ist der Wirtschaftsmotor, der so wichtig ist. Das ist also eine wirklich positive Maßnahme.

Schüler: Also gut, um es nach Hause zu bringen, Jason, werde ich dich mit der Mac Greer einsamen Insel Frage schlagen. Wir haben heute vier verschiedene Unternehmen besprochen: Enphase Energy, Ticker ENPH, Tesla, Ticker TSLA, Nucor Steel (NUE) und UPS (UPS). You can only own one for the next five years. Buying it today, which would you choose and why?

Hall: Probably UPS and the reason is, Tesla I'd be terrified to own for that long and not know what's going on. There is just so much expectation baked into its price. Enphase, maybe for some similar reasons and thinking about valuation and the potential for disruption, I think is still very real. Nucor. As we saw over the prior five years, as much as there are tailwinds, big tailwinds, the impact of overseas competition, even as the government continually tries to fight against anti-competitive trade moves from imported steel, was a real drag on its business. I think UPS has so many competitive advantages that are durable. It's expensive, but I still think it's a reasonable price and the tailwinds are just fantastic.

Sciple: I think I will have to agree with you, Jason. Just because of a little bit of uncertainties on valuation with the two growth of your companies there, kicks them out for me. As between Nucor and UPS, there's DHL and foreign competitors, but it's hard to replicate what UPS offers in the same way that you can replicate steel products. For that reason, I just think UPS has a stronger competitive advantage and it has some really strong tailwinds at its back with this continued shift to e-commerce. Even after this past year, e-commerce is not the majority of commerce that's done in the world, and eventually, I believe it will be. In that universe, the folks who are delivering those packages stand to gain a significant amount.

Hall: Agreed.

Sciple: Jason, thanks for hopping on the show with me.

Hall: This was fun, it's always fun.

Sciple: Yeah. Let's do it again sometime. Until then, as always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against the stocks discussed, so don't buy or sell anything based solely on what you hear. Thanks to Tim Sparks for mixing the show, for Jason Hall, I'm Nick Sciple. Thanks for listening and Fool on!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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