CAIM, LLC Newsletter Sign Up


ABOUT THE AUTHOR


POSTS BY CATEGORY

bonds (8)

ARCHIVES


DISCLAIMER

No content published as part of the CAIM LLC blog constitutes a recommendation that any particular investment, security, portfolio of securities, transaction or investment strategy is suitable for any specific person. To the extent any of the content published as part of the blog may be deemed to be investment advice, such information is impersonal and may not necessarily meet the objectives or needs of any specific individual or account, or be suitable advice for any particular reader. Each reader agrees and acknowledges that any specific advice or investment discussed in the blog must be independently evaluated by the reader and his or her adviser in view of the reader's investment needs and objectives.

Gaining More Confidence on the Economy

June 16, 2010

 

In an April blog, we talked about how we liked the industrial stocks, and in particular, Illinois Tool Works (ITW). Yesterday, management came out with some positive comments for their May results. They are guiding the low end of street estimates upward ($.74 to $.80) for the 2nd quarter. There have been some doubters out there for a less than robust 2nd quarter earnings season but it looks like economic strength will continue. Company reported accelerated revenue growth in all 8 reporting segments. the top 3 were transportation, industrial packaging, polymers and fluids. Stock is off 11% from it’s high of $47 and is a good buying opportunity in here.





Cash Is King

March 31, 2010

 

Yes, cash is king, but it certainly does no good under the mattress! One of the most cash rich sectors out their are the industrial. This is an over-weighted sector for us and one of our favorite names is Illinois Tool Works (ITW). In addition to it’s 2.6% dividend yield, this cash rich company ($2.53 free cash flow/sh)has been a master at cutting costs in the downturn and is on it’s way to positive revenue growth in 2010. Even though companies have been keeping lean inventories, at some point they will have to do restocking. GM has recently reported a sales increase of 11.5% in February with some new products selling out! ITW will benefit from all of this. Even if interest rates do move up and cramp economic growth, you have a cash rich company paying you a dividend while you wait. As long term investors, our minimum time horizon is 12-18 months. Our target price is 15x 2012e of $4 or $60. that’s a 20% upside plus the 2.6% dividend yield.





 
Home | Contact Us | Privacy Policy | Sitemap

© 2017 CAIM LLC, All Rights Reserved.