ers is one i already own at slightly lower prices and would highly recommend here below 6:
empire purchases, sells and distributes semi-finished aluminum products to over 200 customers in the packaging, transportation, distribution, automotive, housing and appliance industries located throughout north america, europe, austrailia and new zealand. in addition, the company has supply contracts with aluminum mills throughout the world. further, empire produces prime aluminum extruded products in its baltimore facility.
recently, the company announced that Q3 net sales increased 3% on a year-over-year basis to $110 million. in addition, the firm realized sales growth of 16% for the first 9 months of 2007. while revenue was on the incline, profits sharply declined to $0.05 and $0.41 per share, in that order, for the latest quarter and nine-month period, as compared to $0.20 and $0.70 for the respective time frames in 2006. the company has been impacted by continued pricing pressures from increased competition in north america. additionally, empire's extrusion manufacturing facility has experienced diminished profitability, partially due to operating below optimum capacity. of course, many of the company’s end markets are also currently struggling.
longtime followers of this company may recall that shares were trading at 3.75 during january of 2005. just 15 months later, it traded over 30 dollars per share, illustrating the potential gains possible via undervalued stocks when cyclical business conditions turn. the stock has since returned to those january 2005 levels after plunging 65% since the start of the year, and once again i believe they're suitable for purchase.
while the company still maintains significant concentrations in both customers and suppliers, i can't ignore the 5.3% dividend yield the shares recently offered. in addition, ers is trading for 6.4 times trailing-12-month earnings and for just 8% of sales. certainly, the P/E ratio will expand in the near term as earnings comparisons will likely remain unfavorable, but i can say that i am not the only one who sees value in the stock as two company directors combined to recently purchase 23,000 shares. not a big commitment for a $4 stock, where it was trading at the time, but it's nice to see insiders stepping up.
i believe this stock can trade at least up to 12, so i'd be a buyer here under 6. (but these are just my opinions - DO YOUR OWN DD!!)
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