Is DuPont a Buy?

Posted Jul 27th 2010 4:00PM by Steven Mallas
Filed under: Earnings Reports, duPont(E.I.)deNemours (DD)

E.I. du Pont de Nemours & Company (DD) turned out to be a disappointment. At least in the short term. I say this because I was positive on the stock as a trade back in April when the chemical company reported Q1 numbers.

Since that time, the equity has done nothing, as this chart clearly shows. And yet there are signs the stock wants to climb back. Guess it's all the volatility we've been experiencing.

Today, second-quarter numbers were released to Wall Street. They were very encouraging to investors. According to this article, earnings came in at $1.17 per share on an adjusted basis. Expectations were for earnings of 93 cents per share. That's a great beat. And the icing on the cake is a significant increase in guidance.

So, what does it all mean? It means we're in a tough trading period and that there's no guarantee DuPont will rise anytime soon.

But don't count this idea out just yet. In my opinion, pullbacks should be considered. Also, one should take into account the dividend yield. At the current share price of $40.45, the yield is 4%. Not bad at all.

DuPont is actually seeing a bid as I write this. Shares are up well over 3%, and volume is active. The 52-week high is $41.45. Yep, I still like this company, but only patient players should apply.

Disclosure: I don't own any company mentioned; positions can change without notice.

Tags: DD, Dupont, inthenews