Margin of Safety

  United Parcel Service (UPS) is one of the world’s largest shipping and supply chain management firms. It is head quartered in Atlanta, Georgia, and state as part of their company profile, “In 2021, we delivered an average of 25.2 million packages per day, totalling 6.4 billion packages during the year.”     Over the past five years and during the pandemic has demonstrated the growing need for couriers as well as supply chain management to support the ever-growing e-commerce industry. As globalisation opens less developed worlds to global trade this will only persist in increasing for companies such as UPS to facilitate this growth.    Recently UPS has seen headwinds along with its peers as seen in recent lockdown restrictions in China persisting. Resulting in a glut of capital allocated to China. However, what was indicative of UPS position in the industry was its ability to quickly allocate this glut to demand increases seen in Europe. Insert information abou...

  JB HI-FI is the cornerstone of electronic retail The margin of safety for JB lies in its position in the market, currently, it stands as the major player in retail electronics. Though notable competitors include the likes of Harvey Norman and Kogan. They don’t directly hold the same territory. As Harvey Norman operates in the electronic retail space as well as interior renovation i.e. mattresses, etc. They can be seen as JB’s strongest competitor. On the other hand, Kogan demonstrates the “grey area” of retail, as what I conceive as shady tactics to increase revenue for the firm. As they grey import products they expose themselves as opposed to the manufacturer to any issues with the product. JB demonstrates a strong earnings record over the past ten years with positive EBITDA growth seen over that period. There is no doubt its ability to maintain its earning power in the long-term future (5 years plus) is unquestionable. However, clear headwinds lie in the earnings power for the...