Earnings Off at Precision CastParts
Precision Castparts Corp.manufactures metal components and products for the aerospace industry. It also provides investment castings and forgings for general industrial, armament, medical and other applications; nickel alloys in all standard mill forms from ingots and billets to plate, sheet, strip, tubing, bar and wire, as well as cobalt alloys, for the aerospace,
chemical processing, oil and gas, pollution control and other industries.
[PostStockWidget stock_valuation="" pricetype="live" manual_date="Dec. 21, 2012, 2:04pm GMT" symbolcodes="'PCP'" symbolprices="195" div_align="right"]
In July 2014, we added PCP at $238.77 on the expectation that earnings would continue their positive trend.
Today PCP announced earnings that confirm a second consecutive quarterly decline, thereby forcing us to exit with a 20% loss on a half position. Our rule is to exit whenever there are 2 consecutive declines in quarterly earnings.
The Purple Chips 12 -18 month valuation range is: low $0, high $218.00 (Note that a $0 low valuation signifies that we stand by until earnings resume their uptrend).
EXITING PRECISION CASTPARTS AT $USD 190.02 (PCP-US) HALF POSITION
TOTAL RETURN (paid no dividends) -20.4%
PURPLE CHIPS TARGET: $218.00 POSITION SIZE: HALF (2.5) P/E: 15.2X DIV: .12 (.06%) MKT CAP: $26B Debt: $4.5B RETURN ON CAPITAL: 46.5% EARNINGS YIELD: 8.4% 5 YR EPS Growth rate*:10% P/E/G Ratio: 1.54 EPS: $12.14 2016 EST.: $14.13 2017 EST.: $15.96
*Blended growth rate= 2/3 historical (5yrs), 1/3 forward.
