| Pick-of-the-Month Stock (February 2006) | ||||||
|---|---|---|---|---|---|---|
| Stock Name | SYM | Exch. | Sector | Industry | Date Picked | Pick Price (per share) |
| General Cable Corp. | BGC | NYSE | Basic Materials | Misc. Fabricated Materials | 02/13/06 | $26.30 |
General Cable Corp. develops, designs, manufactures, markets
and distributes copper, aluminum and fiber optic wire and cable products for the
communications, energy, industrial and specialty markets. The Company conducts
its operations thru three business segments: Energy, Industrial and Specialty,
and Communications. The Energy segment provides low-, medium-, and high-voltage
power distribution and power transmission products. The Industrial and Specialty
segment provides wire and cable products that conduct electrical current for
industrial, commercial, and residential power and control applications. The
Communications segment provides wire and cable products that transmit
low-voltage signals for voice, data, video, and control applications.
General Cable's product lines are manufactured in 28 facilities located in 8
countries. Its products are sold worldwide through its operations in North America, Europe
and Oceania. The Company's product lines serves commercial, industrial, utility,
telecommunications, OEM, military/government, retail, electrical, and
communications distributor customers worldwide.
For the 9-month accounting period ended September 30, 2005, General Cable's revenues rose 19% to $1.76B; and net income totaled $20.5M, up from $6.2M. General Cable had a 3-month price growth rate of 53.7% (vs. the Industry's 8.0% rate), a 6-month rate of 73.4% (vs. the Industry's 10.5% rate), and a 12-month rate of 108.2% (vs. the Industry's 16.7% rate). The Company was incorporated in New Jersey in 1922, and has its current headquarters in Highland Heights, Kentucky. Number of employees: 6,300.
Sector: Basic Materials; Industry: Misc. Fabricated Materials; Ticker: BGC; Exch: NYSE; 02/15/06 Price: $26.30)
STOCK GRADE (ASG: 42.74)
BUSINESS & FINANCIAL SUMMARY
(Yahoo)
EXPANDED BUSINESS DESCRIPTION
(Reuters)
STOCK INFO/RESEARCH
(MSN)
OWNERSHIP
(MSN)
KEY DEVELOPMENTS &
RECENT NEWS
(MSN)
HISTORICAL PRICES (Yahoo)
&
PRICE CHART
(IQChart) 
COMPANY'S WEB SITE STOCK'S CORE
STRENGTHS (SEE: Table Below) | Management's Effectiveness (12 Mo.) | . . . | Return on Equity: | 24.38% |
| Profitability (12 Mo.) | . . . | Profit Margin: | 2.30% |
| Stock's Growth Record (12 Mo.) | . . . | Revenue: | 28.10% |
| . . . | EPS: | 563.90% | |
| . . . | Price: | 108.17% | |
| . . . | Dividend: | NA | |
| PE & EPS (12 Mo.) | . . . | Price/Earnings: | 25.95 |
| . . . | Earnings/Share: | 1.00 | |
| Price / Share | . . . | As of 02/15/2006: | $26.30 |
GENERAL CABLE CORP. -
EVALUATION
General Cable's
stock emerged as an ACE'S selection based on the evaluation results of the
criteria listed below. The evaluation results are encapsulated as one value in
ASG (short for ACE'S Stock Grade). ASG
is proprietary variable that was devised by ACE'S to measure the
quality of a stock for investment. General Cable's ASG value of 42.74 is
GOOD.
A. MANAGEMENTS EFFECTIVENESS - EXCELLENT
B. PRODUCTS & SERVICES, SET OF - EXCELLENT
C. SALES -
EXCELLENT
D. CASH FLOW, FREE -
AVERAGE
E. PROFITABILITY - BELOW AVERAGE
F. PRICE-EARNINGS RATIO (P/E) - GOOD (COMPARABLE
TO INDUSTRY'S AVERAGE)
G.
FINANCIAL HEALTH -
BELOW AVERAGE (HIGHER DEBT RATIO THAN INDUSTRY'S AVERAGE).
H.
MARKET CAPITALIZATION -
EXCELLENT
I.
TRADED VOLUME -
GOOD
J.
PRICE GROWTH - EXCELLENT
A. MANAGEMENTS EFFECTIVENESS - EXCELLENT
How well a company performs
generally - in its
business operations, controlling costs, the success of its products and
services in the market place, profitability, and the like - depends on its
management's efficiency. Return on Equity ( ROE) is used by ACE'S as a general indication
of the company's efficiency.
General Cable's ROE (ttm) of 19.42% is higher (by about 120.45% and
25.97%
correspondingly) than the Industry's ROE of 8.8% and the S&P 500's ROE of 15.4%.
(Ref.:
MSN Finance\Key Ratios).
ACE'S gives a preferential rating to a company that has a
comparable or relatively higher ROE than the Industry. ACE'S rating of
General Cable's Management's Effectiveness: EXCELLENT.
^ Back to Evaluation
B. PRODUCTS & SERVICES, SET OF - EXCELLENT
Products and services are the elements that enables a company to have a presence
in its target market and generate sales. The set of products and services that a company has and how successful those products and services performs in the
target market are very important factors in considering a company's stock for
investment.
General Cable's line-up of Products & Services. Communication
cables, energy cables, and industrial and specialty
cables.
COMMUNICATION CABLES:
Wire and cable products for the transmission of low-voltage signals for voice,
data, video and control applications.
-
Data Communications Cables. Cables designed to service the needs of today's
sophisticated voice and data technologies
-
Fiber Optic Cables. Cables for data communications and voice and video
networks, ranging from tight buffer
and armored products for military applications to loose tube and hybrid cables
for communications networks.
- Telecommunications Cables: A broad range of outside plant wire and cable
products, including air core, filled core and specialty wire products for
aerial, buried and duct applications.
- Draka Comteq
Communications Products. Network, central office, audio, industrial
Ethernet, residential, coaxial and OEM products.
ENERGY
CABLES:
Low-, medium- and high-voltage power distribution and power transmission
products.
- Bare and High-Voltage Transmission Cables: BICC® Brand's complete line of
TransPowr™ bare aluminum overhead cables and PowrMax™ insulated high-voltage
cables for buried applications are available in numerous combinations of
aluminum and steel strands and layers to meet the specialized demands of the
electrical utility marketplace.
- Low-
and Medium-Voltage Distribution Cables: line of BICC Brand PowrServ™ and
EmPowr™ copper and aluminum cables serves the total energy distribution needs of
customers in electrical utilities, rural electrical co-ops and the public power
market.
INDUSTRIAL & SPECIALTY CABLES:
Comprised of application-specific cables for uses such as electrical power
generation (traditional fuels, alternative and renewable sources, and
distributed generation), the oil, gas and petrochemical industries, mining,
industrial
automation, automotive, marine, military and aerospace applications, power
applications in the telecommunications industry, and other key industrial
segments.
-
Automotive Products. From ignition wire sets to
battery starter cables for the automotive aftermarket.
-
Cord and Mining Products. Line of products which includes portable cord,
portable power cable and premium grade cable for commercial and industrial
applications, such as in mining, diesel locomotive and welding.
-
Cordset Products. Contractor-grade extension cords, specialty cords and
utility lights which provides power for tools and equipment, and temporary
lighting, on residential, commercial and industrial job sites.
-
Electronics Cables. Products which fulfills
customers' wire and cable requirements in the very dynamic electronics,
sound and security marketplaces. Product offerings in this category includes
hookup wire; communications cable; computer, coaxial and microphone cables; and
special designs for security systems, fire alarms and audio, video and digital
broadcasts.
-
Specialty Cables. Harnesses and Assemblies.
Custom-designed cable, harnesses and assemblies for a wide variety of OEM
applications, including business machines, material handling equipment, factory
automation and industrial and medical equipment.
-
Instrumentation, Power and Control Cables. Brand Rex and BICC® Brand cables
serve the industrial, factory automation, transit, marine, oil rig,
petrochemical and military markets. The instrumentation tray cables and
automation cables are manufactured to satisfy standard, specialized and custom
applications.
Markets &
Customers. General Cable's product lines serves a widespread
variety of markets and customers: Commercial, industrial, utility,
telecommunications, OEM, military/government, retail, electrical, and
communications distributor customers worldwide.
ACE'S
gives a preferential rating to a company who have
a variety of product
and services that have present and continued utility in a broad and
dynamic market.
An estimation of the latter products' utility, distinctive qualities and competitiveness would be subjective assessments.
However, there is one objective data that indicates how well the subjective
elements of General Cable's products and services
are assessed and used by its target market - the company's
sales.
ACE'S rating of
General Cable's line-up of Products & Services: EXCELLENT
^ Back to Evaluation
C. SALES - EXCELLENT
Sales is an important indicator on how a company's products and services
performs in its target market. Generally, a high sales figure is preferred than a lower figure.
Also, a steady and appreciable growth in a company's total sales from one year to the next is a key indicator on how a
company is able (or unable) to sustain and improve the utility of its products and services in the marketplace.
General Cable's annual sales was $1,651M in 12/2001, $1,453.9M in 12/2002, $1,538.4M in 12/2003,
$1,970.7M in 12/2004 and $2,380.8M in 12/2005. Relative to 12/2001, the
Company's sales decreased 11.93% in 2002. Relative to 12/2002, Sales increased
5.81% in 2003, 35.55% in 2004 and 63.75% in 2005, (Ref.:
MSN Money\Financials).
General Cable's ttm annual sales of $2,380.8M was 56.30% more than the Industry's
sales of $1,523.2M.
General Cable's ttm Sales growth rate of 20.80% was 10.2% points higher than the
Industry's rate of 10.60%.
(Ref.:
MSN Money\Research).
ACE'S gives a preferential rating to a company that have demonstrated the ability to
sustain a high and progressively increasing level of sales from year-to-year. General
Cable's
year-to-year annual sales - from 2001 to 2005 - decreased 11.93% in 2002.
However, since 2002, the Company's sales have progressively increased: 5.81% in
2003, 35.5% in 2004 and 63.75% in 2005. In terms of sales
volume, the Companies past 12 month sales is 56.30% more than the Industry.
In terms of growth rate,
General Cable's rate surpasses the Industry by 10.2% points. ACE'S rating of
General Cable's Sales Growth Rate: EXCELLENT.
^ Back to Evaluation
D. CASH FLOW, FREE -
AVERAGE
Cash flow is crucial to the operation and survival of companies. A company
having ample ready cash ensures that creditors, employees, and others can be
paid on time.
Cash flow could be considered as a better measure of a business's profitability
than earnings, because a company can show positive net earnings and have insufficient cash flow (that is, the company
is not able to pay its debts). Cash Flow
thus can be used as an indicator of a company's financial strength.
General Cable's cash flow during the past 4 years: $86.0M in 12/2001;
$61.3M in 12/2002; -$14.5M in 12/2003; and $12.5M in 12/2004.
(Ref.:
MSN Money\Financials).
ACE'S
gives a preferential rating to a company that have demonstrated the ability to
sustain a positive and appreciable cash flow from year-to-year. General
Cable's
year-to-year cash flow - from 2001 to 2004 - have been positive except for 2003
(when the figure dropped to -$14.5M). The Company's cash flow had rebounded back
on the plus side in 2004 (to $12.5M). The figure for
12/2005 is not yet available as of 02/14/06. ACE'S rating of
General Cable's Cash Flow: AVERAGE.
^ Back to Evaluation
E. PROFITABILITY - BELOW AVERAGE
Making a profit is the ultimate goal of every company. A useful gauge of a
company's profitability is its net income (also referred to as "earnings"). Related to a company's outstanding shares of common stocks, the company's total earnings is transformed
to "earnings per share" (or "EPS" for short). EPS is a very popular indicator of a company's profitability and a
powerful variable that influences the price of a company's stock.
General Cable's annual Net Income, for the past 12 months, of $39.2M is
11.91% less than the
Industry's Income of $44.5M). For the past 5 years, General Cable's annual Net Income are:
-$3.0M
in 12/2001; -$24.0M in 12/2002; -$4.8M in 12/2003; $37.9M in 12/2004; and $39.2M in
12/2005. In terms of growth, General Cable's Net Income have grown
3.4%
during the past 12 months (vs. the Industry's -2.80% growth rate).
(Refs.
MSN Money\Financials\Statements;
MSN Money\Wizard)
ACE'S gives a preferential rating to a company that have demonstrated the ability to
sustain a positive, appreciable and increasing net income..General
Cable's
year-to-year annual Net Income - from 2001 to 2003 - have been negative.
Starting in 2004, net income
rebounded to the plus side (relative to 2003, up 889.58% to $37.9M in 2004; and
up 916.67% in 2005 to $39.2M). In terms of
income growth rate,
General Cable's rate surpasses the Industry by 6.2% points. ACE'S rating of
General Cables 5-year Profitability: BELOW AVERAGE.
F. PRICE-EARNINGS RATIO (P/E) - GOOD (LOWER THAN
INDUSTRY'S AVERAGE)
A stock's Price-Earnings ratio tells us roughly how much investors are willing
to pay per dollar of earnings. Price-Earnings
is a ratio of a company's current share price compared to its per-share
earnings. The P/E ratio is a much better indicator
of the value of a stock than the market price alone.
In general, a high P/E means high projected earnings in the future. As such, the
P/E ratio could be interpreted as the reflection of the market's optimism concerning a firm's growth prospects. To
determine whether a particular P/E is high
or low, take into account a company's growth rates; and the P/Es of other
companies in the same industry. Historically,
the average P/E ratio in the market has been around 15-25.
General Cable has a P/E ratio of 25.95 (ttm) which is
3.28%
points higher
than the
Industry's P/E of 22.67 (ttm)
(Ref.: Yahoo! Finance\Competitors)
ACE'S gives a preferential rating to a company that has a
comparable or relatively lower P/E than the Industry. ACE'S rating of
General Cable's P/E Ratio: GOOD (COMPARABLE TO INDUSTRY'S AVERAGE)
^ Back to Evaluation
G. FINANCIAL HEALTH -
EXCELLENT
The assumption of debt, i.e., financial leverage, are used by companies to
finance its assets. The magnitude of the debt's expense component affects the company's net income.
A company with significantly more debt than equity is considered to be highly
leveraged. A popular measure of financial
leverage is the "debt/equity ratio". A higher debt/equity
ratio generally means that a company has been aggressive in financing its growth
with debt. This higher ratio can result
in volatile or negative earnings as a result of the additional interest expense.
Thus, the Debt/Equity Ratio is popularly used
as a measure of a company's financial health.
General Cable's has a 1.74 Debt/Equity Ratio (latest 12 months). Compared with the Industry's
0.57 and the S&P 500's 1.07, General Cable has an excellent debt ratio.
ACE'S gives a preferential rating to a company that has a
comparable or relatively lower debt ratio than the Industry. ACE'S rating of
General Cable's
Debt Ratio: BELOW AVERAGE (HIGHER RATIO THAN INDUSTRY AVERAGE).^ Back to Evaluation
H. MARKET CAPITALIZATION - EXCELLENT
Market Capitalization (or market cap for short) is a measure of a company's
size. The market cap provides a broad gauge
of the growth-versus-risk potential of a company. Historically, large caps have
experienced slower growth with lower
risk; whereas small caps have experienced higher growth potential, but with
higher risk.
The market cap of a company is calculated by multiplying the number of its
outstanding shares by the shares' current market price. There are presently six classes of Market Cap: Mega Cap, Big/Large
Cap, Mid Cap, Small Cap, Micro Cap and Nano Cap. ACE'S assigns an
Excellent rating to Small Cap stocks; Good to Mid Caps; Average to Big/Large
Caps; and Below Average to Mega Caps. ACE'S excludes Micro
and Nano Caps in its stock picks.
General Cable is classified as a small cap value company with a market
capitalization of $1,032.67M and with outstanding shares of
ACE'S gives a preferential rating to small and mid cap companies. ACE'S rating of
General Cable's
Market Cap: EXCELLENT.^ Back to Evaluation
I. TRADED VOLUME -
GOOD
A stock's price goes up or down based on the laws of supply and demand. Simply
stated, when a stock's price goes up, there must be significant buying demand
for the stock. Volume is the actual number of shares traded daily. Traded volume
could be used as a gauge of the demand for a stock.
General Cable has an 3-month Average Daily Volume of 442,337 shares; and
a 10-day Average Daily Volume of 751.186 shares.
(Refs.:
Yahoo! Finance\Statistics).
ACE'S assigns an Excellent rating for
+1,000,000 trading volumes; Good for 500,001-999,999 volumes; Average for
100,000 - 500,000 volumes; and Below Average for -100,000 volumes.
ACE'S gives a preferential rating to a company that sustains a
lively trade volume from week-to-week and month-to-month. ACE'S rating of
General Cable's Traded
Volume: GOOD.
J. PRICE GROWTH - EXCELLENT
DISCLAIMER: ACE'S assumes no responsibilities for actions taken
by the reader(s) of this site and/or buyer(s) of ACE'S stock picks. ACE'S is
not providing investment advice. ACE'S is providing equity research
information. ACE'S do not make any claims, promises or guarantees
that the information contained in this site will result in a profit, loss or any
other desired result for the subject reader and/or buyer. The reader and/or
buyer assumes all the risk, including but not limited to loss, of capital
consequential to their investment actions. (SEE: FULL
DISCLAIMER)
Price growth is the 12-month increase in the price of a
stock (displayed as a percentage). As of 02/14/06, General Cable had a 3-month growth
rate of 53.7% (vs. the Industry's 8.0% rate), a 6-month rate of 73.4% (vs.
the Industry's 10.5% rate), and a 12-month rate of 108.2% (vs. the
Industry's 16.7% rate).
(Refs.:
MSN Money\Research). ACE'S gives a preferential rating to a company that have
demonstrated a solid capacity for high price growth and outperforming other
stocks in the Industry. ACE'S rating of
General Cable's
Price Growth: EXCELLENT.