Wednesday, August 31, 2011

Macro Idea - Parcel Mail

With the Post Office in continual discussion about layoffs and delivery cutting it occurs to me that the current economic environment could finally catalyze action against words.  An immediate effect would be growth in private label shipping (UPS, FedEx), and after that, there will be interplay among internet purchasing taxation, shipping and handling costs, and the overhead of running a local store.

An early effect for the stocks should be EPS growth as extended labor hours cost less than infrastructure capex. Even after that, a small field of competition and high barriers to entry virtually ensure margins will be held for the medium term, despite growing operating expense.

This pullback could be a gift for longer term investors.