Markets are now in their Santa phase. Expect rallies with brief interruptions for consolidation or p...
A Stock That’s Hard to Contain
07/05/2007 12:00 am EST
Dan Sullivan, editor of The Chartist, says container maker Owens-Illinois has reported blow-out earnings and has a strong chart pattern to boot.
As one of the world’s largest glass and plastics packaging companies, Owens-Illinois (NYSE: OI) supplies containers for a wide variety of food, beverage, beer, health care, household, and drug and chemical products. Approximately 50% of the glass containers made worldwide are manufactured by OI, its international affiliates or its licensees.
The company’s glass-containers segment offers a wide range of shapes and sizes for food, beer, wine spirits and other nonalcoholic beverages. Its containers are used by many of the best-known consumer- products companies in the world. In addition, OI is a technological leader in the fields of health care packaging and specialty closure systems, including tamper-evident and child-resistant closures, prescription bottles and other medical devices.
The key to OI’s success is its ability to deliver both innovation in its packaging products and low-cost production. In 2005 it built the world’s most modern glass-manufacturing facility in Windsor, Colorado. As part of its global expansion strategy, the Perrysburg, Ohio company established a European headquarters in Lausanne, Switzerland. Also, since 1991 it has acquired 18 glass-container businesses in 18 different countries and six plastic-packaging companies in 11 different countries.
Its global expansion efforts have paid off. In 2006, Europe accounted for 43% of sales, followed by North America (33%), Asia/Pacific, and South America (12% each). In the first quarter, profits more than doubled to $53.2 million, or 30 cents a share, from a year earlier. Revenue rose 11% to $1.87 billion. The consensus estimate was for earnings of 16 cents per share and revenue of $1.78 billion, (so OI topped both forecasts—Editor). The strong results were due to improved glass volumes and product mix, as well as favorable exchange rates, mainly in Europe and Australia.
[So far this year], the stock has [nearly doubled], including a 15.9% gap higher on April
26 when it announced its first-quarter earnings. Currently, it trades near its 52-week high (just below $36 in Thursday’s trading). Also, it trades well above its up-trending 50-and 200-day moving averages.
Both Newfield Exploration and Pioneer Natural Resources are trading near trendline resistance, and a...
At worst the tax cuts will validate current market valuations, says Tom Essaye. At best they’l...
Political news is back driving markets at least until the FOMC today and ECB Thursday. Markets are w...