Nice article about GLW in Barrons today, citing their 20% dividend increase and expected Qtr/qtr growth in revenue.
Their annual dividend of .36/share provides a 2.7% return based on Fridays close.
While they are still dependent on display glass, they have good potential upside in solar, health science and building materials (Dow-Corning JV)
Weeks is committed to increasing revenue from current 8 bil to 10 bil in 3 yrs.
At a trailing p/e of less than 10 this one is a no brainer.
Bottom is in.
BTW if as mentioned in Wed's debate Corp taxes get lowered to 25% that will provide additional gas to GLW and other blue chip stocks.
mad2
Barrons | SATURDAY, OCTOBER 6, 2012
Corning's Glass: Set to Sparkle By STEVEN M. SEARS
The options market is skeptical about the glass maker, but as an earnings report looms, the skeptical outlook merits its own skepticism. Also, pending super options may dent NYSE Euronext and Nasdaq OMX.
Corning declared a 20% increase last week in its quarterly common-stock dividend. The move should help secure the company's recently strong stock gains.
Corning (GLW) is up 12% in the past month, about three times the rise in the Standard & Poor's 500 index. We've liked the stock since June when we learned Corning had introduced Willow glass, a flexible substance that can be wrapped around objects and devices. Now Corning is preparing to report third-quarter earnings Oct. 24, and there is reason to be skeptical of the options market's skepticism.
Goldman Sachs analyst Simona Jankowski expects the company to report its first year-over-year sales growth in four quarters and first earnings-per-share gain in eight quarters.
Yet, the implied volatility of Corning's bearish put prices is elevated, reflecting investor concern that the shares will decline on the earnings report. In contrast, Corning's bullish call options, which increase in value if the stock rises, are inexpensive.
The skepticism creates opportunities for investors to sell bearish puts to position themselves to buy the stock at a lower price, and to buy bullish calls to participate in a potential earnings-led advance.
The fundamentals of liquid-crystal displays, used in flat-screen televisions, computer monitors, and the like are believed to be improving, if for no other reason than that LCD glass and panel makers are getting smarter about managing supply, which helps mitigate demand, or the lack thereof. Weak LCD fundamentals are a primary reason why Corning's stock shed 4% of its value in the past three years, as the S&P 500 rose 51%.
With Corning's stock at $13.38, Goldman Sachs' derivatives strategists are telling clients to buy the November $14 calls, recently at 30 cents, in anticipation that the stock will rise 7.2% on earnings. Aggressive investors who want to build a position in Corning should complement the call trade with a put sale. Premiums in near-month puts aren't high, but selling Corning's November $13 put for 49 cents looks reasonable. If the stock dips below $13, you own it, which isn't an unpleasant outcome. |
