The last few months have decimated whole sectors of the stock market (cyclicals, materials, energy, semis, etc.). One stock has had been particularly hard hit but is on the verge of a turnaround of fortune is Corning.
Corning (NYSE:GLW) – “Corning Incorporated manufactures and processes specialty glass and ceramics products worldwide. It operates in five segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials, and Life Sciences.” (Business Description from Yahoo Finance)
8 reasons Corning is significantly undervalued at $12.60 a share:
- Insiders have bought over a $1m of shares in the last two months.
- The board just showed its confidence in the company by authorizing a $1.5B share buyback and upping its dividend by 50%. GLW will now yield 2.5%.
- It is selling at the very bottom of its five year valuation based on P/S, P/E, P/B and P/CF.
- Corning has a pristine balance sheet with more than $4b in net cash on its books, which equates to more than $2.50 a share.
- Corning has a five year projected PEG of under .6 which is a 35% discount to its five year average.
- Its Gorilla glass product line will benefit greatly from the growth in tablets and smart phones.
- Corning has grown earnings at an over 13% annual clip during the past decade. Despite this record of growth during difficult times, GLW is priced at just over 5 times this year’s earnings after you strip out net cash.
- GLW is priced dramatically under analysts’ price targets. The median analyst target on Corning is $20. S&P has a price target of $19 on GLW.
Disclosure: I am long GLW.