Question:
I am looking for a new investment idea...I want to invest in a stock
in a basic industry that is easy to understand, has a market cap of
between $1 billion and $5 billion and has a valuation of less than 6x
EBITDA-CX. Any ideas???
Answer:
I've included a list of companies that fit your criteria. All operate
in an industry that doesn't require an advanced degree to understand.
All have Price/EBITDA ratios below 6, and all are between $1 billion
and $5 billion in market capitalization. Names, tickers, industry
affiliations (Standard & Poor's classifications), yesterday's closing
prices, and market value and price/EBITDA based on those prices, are
included. I limited my list to U.S. companies.
Personally, I look for a mix of growth and value in my investments,
and most industrials in that valuation range do not appeal to me. But
there are plenty of investors out there who can time the market better
than I can, and these cyclicals could do well for them.
Out of this list, my top two choices are Freeport McMoRan and Scotts,
both of which offer growth as well as value. Additionally, I'd stay
away from all of the paper stocks unless you know something about the
progress of the paper market that I don't (which wouldn't necessarily
be a difficult feat).
Here is the list:
Company Name Ticker Symbol Price Market Cap
($Mil.) Price/EBITDA Industry
HUNT (JB) TRANSPRT SVCS INC JBHT $37 $1,462 5.924 Air Freight &
Couriers
CNF INC CNF $30 $1,492 4.645 Air Freight & Couriers
RYDER SYSTEM INC R $27 $1,664 2.080 Air Freight & Couriers
CELANESE AG CZ $24 $1,204 2.716 Commodity Chemicals
METHANEX CORP MEOH $10 $1,297 4.809 Commodity Chemicals
LYONDELL CHEMICAL CO LYO $14 $2,323 5.557 Commodity Chemicals
CNH GLOBAL NV CNH $8 $1,095 1.087 Construction & Farm Machinery
CUMMINS INC CUM $34 $1,333 4.247 Construction & Farm Machinery
MARTIN MARIETTA MATERIALS MLM $34 $1,669 5.327 Construction
Materials
LAFARGE NORTH AMERICA INC LAF $31 $2,301 3.795 Construction
Materials
HERCULES INC HPC $10 $1,094 3.064 Diversified Chemicals
EASTMAN CHEMICAL CO EMN $33 $2,525 4.139 Diversified Chemicals
PEABODY ENERGY CORP BTU $33 $1,722 4.388 Diversified Metals Mining
NORANDA INC NRD $9 $2,191 4.549 Diversified Metals Mining
FREEPRT MCMOR COP&GLD -CL B FCX $22 $3,191 3.544 Diversified
Metals Mining
ALLIED WASTE INDS INC AW $10 $1,939 1.112 Environmental Services
REPUBLIC SERVICES INC RSG $24 $3,850 5.892 Environmental Services
IMC GLOBAL INC IGL $9 $1,006 2.856 Fertilizers & Agricultural
Chemicals
SCOTTS CO SMG $50 $1,525 5.474 Fertilizers & Agricultural Chemicals
RAYONIER INC RYN $52 $1,436 4.911 Forest Products
TEXTRON INC TXT $35 $4,708 3.678 Industrial Conglomerates
AIRGAS INC ARG $18 $1,300 5.453 Industrial Gases
TIMKEN CO TKR $16 $1,400 5.078 Industrial Machinery
HARSCO CORP HSC $35 $1,435 4.304 Industrial Machinery
SPX CORP SPW $39 $3,007 3.649 Industrial Machinery
OWENS-ILLINOIS INC OI $11 $1,687 1.343 Metal & Glass Containers
PACTIV CORP PTV $20 $3,114 5.047 Metal & Glass Containers
SONOCO PRODUCTS CO SON $22 $2,167 5.125 Paper Packaging
TEMPLE-INLAND INC TIN $47 $2,521 3.680 Paper Packaging
SMURFIT-STONE CONTAINER CORP SSCC $15 $3,566 3.975 Paper Packaging
SEALED AIR CORP SEE $44 $3,704 5.448 Paper Packaging
BOISE CASCADE CORP BCC $25 $1,432 3.123 Paper Products
DOMTAR INC DTC $11 $2,400 4.487 Paper Products
ABITIBI CONSOLIDATED INC ABY $7 $2,983 5.571 Paper Products
GEORGIA-PACIFIC CORP GP $17 $4,330 1.939 Paper Products
ALBEMARLE CORP ALB $27 $1,103 5.796 Specialty Chemicals
GREAT LAKES CHEMICAL CORP GLK $23 $1,156 5.917 Specialty Chemicals
CYTEC INDUSTRIES INC CYT $33 $1,274 5.862 Specialty Chemicals
RPM INTERNATIONAL INC RPM $12 $1,437 5.714 Specialty Chemicals
LUBRIZOL CORP LZ $32 $1,643 5.509 Specialty Chemicals
UNITED STATES STEEL CORP X $16 $1,622 3.386 Steel
Search strategy: None. Just screened for stocks. |
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