For investments in large-cap companies with demonstrated business models and a competitive advantage in established markets -- preferably with a favorable, global trend as a support -- General Cable Corporation (NYSE: BGC) is worth a review. General Cable Corporation develops, designs, manufactures, markets, distributes and installs copper, aluminum and fiber optic wire and cable products.
Overall, analysts like General Cable's strong market position in each product area, and its ability to serve as the low cost provider.
Further, General Cable has one of the most diversified product lines in the industry and hence is able to offer its customers a single source for most of their wire and cable requirements. The First Call F2009 / F2010 EPS estimates for BGC are $2.61 / $3.28.
The North American segment accounted for the bulk of F2008 revenue: electric utility (35% of division's revenue), electric infrastructure (49%), and communications (56%). The company also operates in Germany, France, Portugal, Spain, and Norway, and in other regions.
The risks? A delayed global economic recovery would weigh considerably on General Cable's results, but its strengths, and a P/E of 9, tips the scale in favor of a Buy.
Stock Analysis: General Cable is a moderate-risk stock. Consider buying a 25% position in BGC now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your BGC position in the first half of 2009. Sell/Stop Loss if you were to buy shares in this company: $17.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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