Warren Buffett has become a billionaire from investing in high-quality companies with strong competitive advantages and world-class management teams.

Investors can gain valuable insight into Buffett’s investment strategy by reading his annual reports and looking through his 13F filings – which list the holdings in Berkshire Hathaway’s investment portfolio.

One of Buffett’s smaller investments is United Parcel Services (UPS).

Through his conglomerate Berkshire Hathaway (BRK-A) (BRK-B), Buffett owns 59,400 shares of UPS that are worth approximately $6 million. $6 million might seem like a large stake for individual investors like you and I, but Berkshire’s UPS investment is dwarfed by some of its larger bets:

As you can see from the company’s above, Buffett’s portfolio is filled with dividend stocks.

Looking at Berkshire’s stake in UPS, Buffett seems content to sit on his investment. He reported no buying or selling of UPS shares for the quarter ending December 31, 2016. Moreover, the Oracle of Omaha has held shares of UPS since 1Q2006 – a holding period of nearly 11 years.

This article will discuss the investment prospects of UPS in detail.

Business Overview

UPS is the world’s largest logistics company with a focus on package delivery.

The company was founded in 1907 as a private messenger and delivery service in Seattle. After decades of sustained growth, UPS is an industry leader with a $92 billion market capitalization.

UPS divides their operations into three segments for reporting purposes:

Growth Prospects

UPS will benefit from a variety of growth drivers moving forward.

The first, and perhaps most obvious, is the continued growth in the global economy. As trade volumes increase between globalized countries, the logistics market will grow as well. UPS will benefit from this trend.