Yesterday's sharp drop was probably triggered by the announcement of a $1 special dividend. As SNHY is now ex-dividend, the stock should have dropped $1.09 ( special div of 1.00 plus the 0.09 regular dividend). The additional drop was probably a market spooked by the initial drop and then running wild on a thinly trade stock. Expect a recovery in the next few days.
"Some manufacturers are still benefiting from strong export demand and continue to see growth in export orders"
The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The manufacturing sector failed to grow in March as the PMI fell below 50 percent for the second consecutive month. This completes the weakest quarterly performance for the U.S. economy since Q2 of 2003. Manufacturers' order backlogs continue to erode as the New Orders Index failed to grow for the fourth consecutive month. Additionally, manufacturers continue to experience heavy cost pressures, as the prices they pay are still rising even with slower overall demand. Some manufacturers are still benefiting from strong export demand and continue to see growth in export orders."
I disagree. True, the stock price performance has been terrible in the SHORT TERM, but all that will change as the market's perception the economy gets better. Right now, the company's stock has fallen victim to multiple contraction, which simply means that investors aren't willing to pay as much per share for good earnings as they did before. Now that the P/E is actually lower than its growth rate, value investors should start buying up shares at this level, which should offer some protection against further downside. Be patient. As soon as all of these pesky fears of recession finally blow over, I am confident SNHY will have a great comeback.
I like your phrase "pesky fears of inflation." So far there have been no indications we are in a recession or firm evidence we are headed for one. Growth last year was 2.2% according to what I have read. Predications are for 2.7% growth this year. Sluggish growth has been indicated, but recession has not. Recession is NO or NEGATIVE growth, not slow growth.
Yes, these are "fears." IMHO, some of this fear is what is propelling this slow growth. The economy actually wants to grow, but peoples' fears are making them do stupid things with their money, like buying money market and fed bonds that pay nothing instead of investing in the future in stocks like SNHY.
What Mr. Market is telling you by bidding the price lower and lower is that it has no confidence in the E in SNHY's PE. So your PEG calculations hold no weight until they prove otherwise. Even when they do the market will have no confidence that the next quarter will be good.
Very stupid of MFHG to recommend a small cap industrial at this time. It will likely drive much lower.