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Dear Mr. Berko:

Dear C.P.:

You don’t need another broker. You need another brain. That stock was so overpriced that my dogs Sigmund and Freud wouldn’t go within a mile of it. SunPower Corp. (SPWRA-$27) sells solar power products such as solar cells, solar panels and inverters that convert sunlight to electricity, and also sells power systems and systems technologies. SPWRA has successful operating solar systems in Italy, Germany, Portugal, Spain, South Korea and the United States.

In 2008, SPWRA produced revenues of $1.4 billion and earnings of $1.08 per share. In 2009, revenues are expected to come in at $1.9 billion with projected earnings of $1.65 a share.

However, you got caught up in the market hubris and foolishly bought a stock that was trading at darn near 150 times earnings. Nothing in the universe is worth 150 times earnings.

Here’s my recommendation. Sell the 50 shares that cost you $6,000 and take a loss. Now, because SPWRA is not going to go anywhere soon, wait 31 days and buy 200 shares. Frankly, I think the stock could fall to the $20 level so I’d place an open, good-till-cancel order to buy 200 shares at $20.

Several analysts believe that SPWRA will generate $3.8 billion in revenues by 2013 and could earn $3.50 a share. This stock could realistically trade at 15 to 18 times earnings, which could translate to a $60 share price in the coming four years.

Both FedEx Corp. (FDX-$54.34) and United Parcel Service Inc. (UPS-$56.13) are superb companies.

UPS expects a decline in revenues from $51 billion to $49 billion for 2009 and a pickup in revenues to $53 billion for 2010. The consensus indicates earnings of $2.8 billion in 2009 and $3.4 billion in 2010.

FDX expects a slight decline in revenues from $37.9 billion 2008 to $37.5 billion in 2009, and an uptick to $38 billion in 2010. The consensus indicates earnings of $1.3 billion for 2009 and $1.4 billion for 2010.

I think UPS is a better company for the following reasons:

1. Net profit margins for UPS have averaged 8 percent over the past decade, which is twice the 4 percent net profit margins of FDX.

2. The UPS 10-year average return on shareholders’ equity is about 22 percent, which is twice the 10-year average return of 11 percent for FDX.

3. UPS pays a dividend that has tripled in the last decade from 58 cents to $1.80 a share for 2009. FDX pays a niggardly dividend of 44 cents.

4. UPS uses 100,000 ground vehicles and 617 airplanes to produce $2.9 billion in net profits. FDX uses 1.4 million ground vehicles plus 677 airplanes to produce $1.3 billion in net income.

5. Each UPS employee brings $6,500 in annual net income to the company’s bottom line, while each FDX employee brings $4,500 in annual net income.

Both should do well during a recovery, but I suspect that the share price of UPS will perform better than the share price of FDX.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net. © Copley News Service