4-Star Stocks Poised to Pop: Central European Distribution
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, alcoholic beverage distributor Central European Distribution(CEDC) (NAS: CEDC) has earned a respected four-star ranking.
With that in mind, let's take a closer look at CEDC's business and see what CAPS investors are saying about the stock right now.
CEDC facts
Headquarters (Founded) | Mt. Laurel, N.J. (1990) |
Market Cap | $248 million |
Industry | Distillers and vintners |
Trailing-12-Month Revenue | $825.9 million |
Management | Chairman/CEO William Carey (since 1997) |
Return on Capital (Average, Past 3 Years) | 3.3% |
Cash/Debt | $111.2 million / $1.34 billion |
Competitors | Diageo (NYS: DEO) |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 96% of the 687 members who have rated CEDC believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars tenmiles and TSIF, both of whom are ranked in the top 0.1% of our community.
Just last week, tenmiles tapped CEDC as a timely bargain opportunity: "Spirited decline with goodwill writedowns and trouble in Russia, but believe there may be value here from private equity."
In fact, CEDC sports a particularly paltry forward P/E of 4. That represents a clear discount to industry peers Diageo (13.3), Brown-Forman (NYS: BF.B) (18.5), and Constellation Brands (NYS: STZ) (9.1).
CAPS All-Star TSIF elaborates on CEDC's earnings miss last week as a possible buying opportunity:
The guidance is ugly, anywhere from a profit to a loss. In reality, however, the news required some interpretation that I don't think some investors took time to give it. The quarterly operating loss of $645 Million included $674 Million of non-cash impairment charges against goodwill and trademarks. The vodka in inventory remains secure. ... The expansion into Europe has been costly and the debt excessive, but overall, the European market should be ready to drink their sorrows as the Eurozone implodes.
The company appears to be cutting some corners and trying to improve pricing and input costs. ... I'm willing to give them some benefit of the doubt that they can sell a recession proof product with a strong brand name in sufficient volume to make a profit. The proof will be in the next few quarters.
What do you think about CEDC, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
Interested in another easy way to trackCEDC?Add it to your watchlist.
At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of CEDC and Diageo. The Fool owns shares of Diageo. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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