I have been watching all the coverage on Hurricane Sandy on television over the past few days and thinking about all my friends and colleagues in the Northeast. I am also jonesing from four days of not being able to trade. I have been thinking a good play on the storm damage could be General Cable (NYSE:BGC).
General Cable Corporation manufactures and distributes copper, aluminum, and fiber optic wire and cable products for use in the energy, industrial, construction, specialty, and communications markets worldwide .
6 Reasons BGC looks like a good value play at under $30 a share:
- 34% of revenues come from sales to electric utilities and another 35% comes from other electrical infrastructure customers. With all the damage to the electrical infrastructure in the northeast, seems like a good place to be right now.
- The stock is selling near the bottom of its five year valuation range based on P/S, P/CF and P/B.
- The median price target by the six analysts that cover the stock is $36.50 a share, more than 20% above its current stock price.
- The stock is cheap at just 3% above book value and under 9.5x forward earnings, below its five year average (12.0). S&P also recently upgraded its credit outlook to "stable" from "negative".
- Earnings are expected to jump from this year's projected $2.43 to $3.15 a share in FY2013 and those projections were before Sandy.
- The company is now bigger measured by market capitalization than some S&P stocks making it a possible candidate to go into that index at some point in the future. In addition, revenue growth is poised to accelerate to 11% to 12% in FY2013 as the result of a recent acquisition.