FR: Avoid the Post Office With This Industry Leader

Article: Avoid the Post Office With This Industry Leader

My first “Fool Revisited” piece in a while looks to be about a company that has done quite well for itself in the nearly seven years that I wrote the article. I’d like to think that my stupid little piece had an impact on that, but I am also humble enough to know that that is not the case.

If you listen to any number of podcasts, you might here advertisements for Stamps.com (Nasdaq: STMP). The pitch is that they send you a free scale and you can “buy and print postage” from your house, avoiding the post office altogether. Even then, this seemed like a quaint idea, as if a majority of people were still going to the post office to mail things. With the advent of social media and wider acceptance of email, it seemed to me that the act of mailing things to folks was going to be reserved for packages and companies like FedEx (NYSE: FDX) and UPS (NYSE: UPS), among others.

I think I pointed out a solid investment thesis for Stamps.com back then: even with declining postal revenues, Stamps.com (as of 2010) could still print postage for around 72% of the included classes of mail. Furthermore, there are some items, like letters and bulk mailings, that the likes of UPS and FedEx are not allowed to deliver in order to keep the post office in business. Even companies like Amazon (Nasdaq: AMZN), with its fleet of branded planes and lucrative shipping deals with multiple carriers, often relies on post offices to deliver some of their customers’ orders the last “delivery mile,” so the fears of the post office failing to exist still seem overblown.

The article was basically a soft pitch to “keep an eye on the stock” and not really a recommendation to buy, but had somebody decided to jump in on the date of publication and held onto the stock, they would have been extremely happy (based on closing prices on 11/16/2011 and 8/24/2018):

Source: Yahoo! Finance & author calculation; Stock prices include dividends & stock splits

In the midst of the longest bull market ever, Stamps.com has managed to outperform the market by a factor of nearly 341%! Instead of mocking your favorite podcaster’s read of the Stamps.com ad, scoffing as they claim stories of mailing out so much stuff and all that, you should have just bought shares in the stock instead of signing up for the product. I probably have the value of Stamps.com 2011 price in actual stamps in various places around my home, and have definitely not mailed 68 letters requiring stamps in that time. Definitely should have bought the stock, and laughed as I clicked send on all those emails.

Hindsight is 20/20, and in the case of Stamps.com, they’ve made us all look a little blind.

Until next time…

Disclaimer: I do not personally own shares of the companies mentioned here, but I purchased shares in an account that I manage. I have no intent to sell or purchase more shares within the next 60 days. You can read a little about my personal investment philosophy here.