Talk about advances. Institutional investor (II) sentiment on Whirlpool Corp. (NYSE: WHR) has strengthened in-sync with the strengthening global economy, and that's why I'm reiterating my Buy rating for the appliance manufacturer, first recommended on April 13, 2009 at a price of $34.47. If you bought WHR in April, you're up a remarkable 111%.Whirlpool's pleasant growth story remains the same: emerging market sales, particularly in Latin America (20% of revenue), are sending growth signals; Europe and the U.S. may lag for 1-2 more quarters; the U.S. market looks like the major hurdle -- with household formation likely to remain sluggish into mid-2010. Overall, look for FY2010 revenue to increase 4-6%; in FY2011, WHR is likely to return to double-digit revenue growth.
Another Whirlpool positive: the company has an economies-of-scale advantage that will help it increase market share in key markets. Meanwhile, cost controls remain adequate. The First Call FY2009/FY2010 EPS estimates for WHR are $4.32 to $6.04.
Technically, Whirlpool's stock chart is strong -- a strong uptrend, with minor, constructive pull-backs, and a price that continually stays above the 50-day moving average -- a sign that IIs are adding to their WHR positions. WHR also recently registered a golden cross, in which the 50-day MA crosses above the 200-day MA -- a bullish sign.
Finally, the Sell/Stop Loss has been raised to $35, or to just above cost, from $17. Hence, this is a zero-risk trade for your April-bought shares
Stock Analysis: Whirlpool Corp. is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in WHR now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your WHR position before December 2009. Revise Sell/Stop Loss if you were bought shares in this company: $35.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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Reader Comments (Page 1 of 1)
10-30-2009 @ 9:15AM
fatmanjoe1958 said...
if there doing do @#&**^ good thin why are thay shutting down the # one plante that has bine in evansville in. sence right after ww2 and sending there crap to mexco.crap all the mexcans are up her now???? i hope you go bankrupt whirlpool