Our Top Stock Idea

Editor's note: This article is a stock pitch made by a member on CAPS, The Motley Fool's free investing community. The pitch is published UNEDITED and is the opinion of the CAPS member whose pitch it is, in this case:ikkyu2.

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Corning profile

Sources: S&P Capital IQ, Yahoo! Finance, and Motley Fool CAPS

This Week's Pitch:

OK, let's see what [Corning] has got:

1) $24B market cap, $6B in current assets, $4B in debt. Back out the net cash and trailing P/E is about 6.5.

2) 30% sales growth y-o-y for the last 2 years, although sales took a nasty dip in 2008 so the subsequent comps were easier. Still a nice 20% increase in 2010 sales over 2007 sales; and margins slightly improving over the whole time as well.

3) Management expects double digit profit growth to continue over the next 2 years. CEO and CFO have been with the company about 3 decades each, and are buying stock at $14-ish.

4) This quarter, raised dividend (now about 2% yield) and authorized stock buyback around $13.50. Price is now $15.19.

5) Inventories shrinking as we head into a holiday season that might be a good one.

6) Best-in-breed when it comes to specialty glasses of all kinds. Household word due to their Visions cookware; also make flatpanel TV screens, smartphone screens, etc. Competition has to explain why Corning's product is too expensive or isn't as good in every case; and in some cases (i.e. iPhone 4 glass, which isn't Gorilla Glass) competition is clearly inferior. Corning has set the standard in glass for nearly a century.

I think we're looking at a pretty basic discounted cyclical value play. Anyone with a long term investment horizon ought to be happy to get this company at this price.

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At the time thisarticle was published The Motley Fool is investors writing for investors. Dan Dzombak did not have a position in any of the companies mentioned in this article. Pitches must be compelling, made in the past 30 days, and be at least 400 words. Motley Fool newsletter services have recommended buying shares of Corning, Becton Dickinson, and 3M, as well as creating a diagonal call position in 3M. 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 Motley Fool has a disclosure policy.

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