Corning Inc. (NYSE:GLW)
Sep
4
Written by:
9/4/2008 3:12 PM
Corning Inc. (NYSE:GLW)
Corning Inc (NYSE:GLW) continues to slide reaching a new 52
week low today after being downgraded by RBC Capital Corp and cutting their
third quarter outlook yesterday. But the current price/earnings ratio is too
low for a company with the earnings and revenue growth displayed.
Third Quarter
Troubles
The company reduced their third
quarter outlook citing weak LCD display demand although consumers continue to
buy televisions containing their LCD glass. The company felt manufacturers are reducing
inventory instead of making new television sets. The new company range for
quarterly earnings is between 43 and 45 cents. Analysts have been expecting 50
cents a share from the specialty glass maker but reduced that number to 47
cents after the company’s announcement.
Looking very Cheap
The stock fell 2% today after a
Wednesday decline of 12%. At a current price/earnings (P/E) ratio of 4.8
investors are anticipating continued demand trouble as the current estimates
are for very strong growth of 32.6% year over year. With 13.5% revenue growth
for the year, the current stock price of $16.68 looks very cheap.
The Trade
You could
wait for the stock to bottom out and make a move to the upside before buying a
little for a longer term hold. If the earnings and revenue continue to be in
the double-digit growth range and the P/E continues to be in the single-digit
area, the stock will be a good buy.