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General Cable Corporation Message Board

  • dimit10 dimit10 Nov 27, 2008 10:15 PM Flag

    BGC is worth around $40/share

    For the several reasons below:

    1. BGC is the biggest electricity wires company in the world. Diversified revenue base, great international exposure.

    2. BGC has high Beta, which is 3. So, the reason this one went from $50s all the way down to $10s is because is reacting 3 times to the downside market. BUT when the market turns around in 2009, BGC will be going up 3X the S&P move.

    3. It is trading 3xEst Earnings. Even of the earnings are half from what they are now, it is still will be trading @ 6x Est Earnings. Still too cheap, when the worst S&P stock is trading at a multiple of 10x. If the P/E expands from currently 3 to 10, BGC will be @ $46.

    4. Their majority of outstanding debt (used to finance their international exposure with the acquisition of PDIC) matures in 2024, way out in time. This almost guarantees their survival of the current credit crunch.

    5. Upcoming upgrade cycle in the power and fiber optic sectors will definitely benefit the company. Infrastructure upgrades in the power grid will DEFINITELY be a HUGE earnings driver for BGC.

    6. Management has been around for quite some time; since at least 2001. So, BGC's management went thru the '01-'02 bear market.

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