Opportunity in Brunswick's Big Drop? (BC)

| About: Brunswick Corporation (BC)

Shares of Brunswick Corp (NYSE:BC) are taking a huge hit today. Despite a 24% increase in quarterly earnings, a year of record sales and net income, and an EPS number that beat analysts’ estimates, the market did not like 2006 guidance of $3.25 to $3.45 EPS. Or at least that’s our best guess for the selloff—we don’t really know why the stock has dropped like a rock.

At the low end of guidance, the forward PE is 11.3—not a bad price to pay for the world leader in boating, bowling, billiards, and commercial exercise equipment. Brunswick has a 1.5% dividend, and $733 million in debt balanced by $536 million in cash. Its market cap is $3.55 billion. We wouldn't be surprised to see short term volatility, so take that into consideration as you do your research on BC.

BC 1-yr chart: