Liquidity, Diversification Makes General Cable Worth Second Look - Barron's
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Price: $10.94 -0.36%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.4%
Revenue Growth %: +3.7%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.4%
Revenue Growth %: +3.7%
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General Cable (NYSE: BGC) shares are trading slightly higher Friday following a bullish article in Barron's earlier.
Barron's notes General Cable has a well diversified portfolio of offerings, "from utilities to infrastructure and telecommunications," yet shares still trade cheap compared with historical valuations. Roughly 30 percent of revs are derived from utilities, 28 percent from infrastructure, and 25 percent from communications, which make up the three main parts of its businesses. The balance gives it exposure to both cyclical and non-cyclical markets.
One analyst contends General Cable has yet to see any 'material recovery' in a lot of its end-markets, meaning that there is still room for margins to grow as demand comes back. The analyst also believes General Cable's operating leverage is under appreciated.
Another argument being made: despite their best efforts, countries can no longer put off infrastructure spending, which will be a boon for General Cable shareholders.
General Cable also has a healthy exposure to consumers increasing demand for electricity. Other customers include those involved in oil & gas exploration and alternative energy sources.
Trading at about 12x forward EPS, General Cable is at the low-end of its historical range.
Issues which investors may be looking at include increasing copper prices (which General Cable can pass to customers) and debt levels on its balance sheet. The debt is a result of acquiring Phelps Dodge Int'l, and one analyst said there is enough liquidity to keep levels manageable.
With manageable concerns and a bright future in its diversified businesses, Barron's believes General Cable is worth a second look.
The stock is up about 0.6 percent ahead of the bell Friday.
Barron's notes General Cable has a well diversified portfolio of offerings, "from utilities to infrastructure and telecommunications," yet shares still trade cheap compared with historical valuations. Roughly 30 percent of revs are derived from utilities, 28 percent from infrastructure, and 25 percent from communications, which make up the three main parts of its businesses. The balance gives it exposure to both cyclical and non-cyclical markets.
One analyst contends General Cable has yet to see any 'material recovery' in a lot of its end-markets, meaning that there is still room for margins to grow as demand comes back. The analyst also believes General Cable's operating leverage is under appreciated.
Another argument being made: despite their best efforts, countries can no longer put off infrastructure spending, which will be a boon for General Cable shareholders.
General Cable also has a healthy exposure to consumers increasing demand for electricity. Other customers include those involved in oil & gas exploration and alternative energy sources.
Trading at about 12x forward EPS, General Cable is at the low-end of its historical range.
Issues which investors may be looking at include increasing copper prices (which General Cable can pass to customers) and debt levels on its balance sheet. The debt is a result of acquiring Phelps Dodge Int'l, and one analyst said there is enough liquidity to keep levels manageable.
With manageable concerns and a bright future in its diversified businesses, Barron's believes General Cable is worth a second look.
The stock is up about 0.6 percent ahead of the bell Friday.
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