Brunswick Takes a Hit
Brunswick shares (NYSE BC) sunk 6% yesterday despite reporting a strong first quarter. Earnings of $.71 met expectations but revenue missed by 1% due to currency headwinds.
Investors apparently were disappointed that management didn’t boost annual guidance more than the $.03 offered considering the strength of its boating business.
We’re on board with management, which has always chosen a conservative path. Guidance for earnings of $3.40 to $3.50 represents 18% growth with upside if the boat business remains robust in the second quarter, the period when most boats are sold.
Brunswick offers tremendous value here and could leap another 40% to our $67 target as it integrates and grows its fitness lines alongside its traditional boat business.
Stock Talk
Jon D.
In younger days I worked for the Dept of the US Navy. The USS Constitution was one of the ships we were tasked to work on. Old Ironsides took some hits too. The cannonballs bounced off pretty often. I appreciate your upfront letting us know of this hit, its like a damage control report.
This points out why I have developed a traders outlook. I think we need to take some moolah off the table when the time is right. I have plotted out a chart daring to use the Ichimoku Cloud! Lets say if a trader had gotten in at about the April low on BC then got out at about the April high they would have pocketed about a 13.6% gain in under a month! I have illustrated this on the chart. For those unfamiliar with Ichimoku, when the price action iOS above the green cloud thats an uptrend. It uses about 26 days to project ahead using moving averages.
The takeaway for a trader should be lets watch the chart and see where its settles in this will provide a better risk to reward entry point. Anyone with nautical experience knows there is risk. If there’s a chance to win I will try it again. I recall a popular question around Boston has been is your boat in the water yet? Probably for many it may be no, since its early days.
I am looking forward to getting BC back in the water Linda, and appreciate the profits you have sent my way.
Remember Folks start of a new month Fund Managers are tasked to put $ to work.
watch those charts http://schrts.co/Gq5q7U
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Jon D.
Brunswick follow up: Heres what I wound up doing something a bit different so far; meaning til now I have always bt the stock on your rec’s. I bt some In-the-money Calls which expire on May 20th @ 2.10 per contract. The most I can lose is the price of the calls; and in theory the max profit is infinite – [talk about theoretical]. To break even the stock needs to reach 49.15; of course I have no idea if that will or will not occur. The thing I am looking more at is I should be able to buy them at the strike price which is $47.00 on May 20th.
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