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AMCOL International Corporation Message Board

  • steve_382 steve_382 Dec 14, 2007 10:57 AM Flag

    Wedbush Morgan Downgrade

    Looks like todays price drop was caused by this.

    Amcol International ACO fell below its 50-day line. It gave up 2.52, or 7%, to 36. Wedbush Morgan cut the bentonite mining firm to hold from buy. Other mining companies, including BHP Billiton (NYSE:BHP) BHP and Companhia Siderurgica Nacional (NYSE:SID) SID, declined as well. Gold prices slipped under $800 an ounce. Silver and copper prices were also lower.

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    • Wedbush lowered 2008 margins by 1.5% and Q4 earnings by 2.5% and the stock is down 10%. I don't get it,A little overkill?

      • 2 Replies to bulldog_wi
      • Valuations might have gotten ahead of themselves. Also, "experts" are increasing odds on a recession, and ACO would not be immune. In other words, the fall may have beena an accident waiting to happen. I certainly don't think analyst's explanations would account for it. Also, while he says he decreased eps from .40 to .39, lowest eps projection Yahoo had was .41, with a .45 average forecast.
        ACO should benefit from depreciation of dollar, especially in JV income.

      • Wedbush Morgan pointed to mining and inflationary cost pressures that continue to impact mineral segment margins; seasonal weather and supplier diversification efforts that could reduce any upside surprise from joint venture income; and modest improvements expected in free cash flow estimates.

        "Although AMCOL has implemented price increases, we surmise that higher mining costs, labor rates and transportation-related costs are muting any potential segment margin expansion story," the firm said in a note to clients. Wedbush Morgan also said it is modelling seasonal rain patterns in the third and fourth quarters, thereby trimming a penny from its fourth-quarter earnings estimate to 40 cents a share.

        The firm maintains a $41 price target on the shares.


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