Low annual EPS could create optimal buying opportunity
PPG Industries has a history of stable EPS growth (with some outliers such as the EPS during the FC in 2008); the Corona lockdown and the stop of production is very likely to affect the EPS of the company in 2020 and maybe its the consecutive year’s growth. Looking at the reduction of EPS during the Finanacial Crisis, two year’s (2008 and 2009) EPS were falling significantly by 35% and 37% respectively. Adopting the relatively pessimistic perspective that the companies current EPS are subject to the same decreases as they were in 2008, annual EPS would be expected to be 3.40 in 2020 and 2.14 in 2021. Therefore, given historical evidence that the company’s share price is not significantly affected by short-term reduction of earnings, a favourable entry price for this business is $3,4*20 = $68, and take profit price when future estimated EPS of $5.24 are plausible ($5.24*20=$104.8).
Investment Idea
Option 1 , Option 2
Entry price: $74 , $68
Take profit or hold: $96.2 , $104.8
Max expected holding period: 18 months , 24 months
Profit: 30% , 55%
I`ll buy the stock as soon as it crosses $68. Good luck!
Investment Idea
Option 1 , Option 2
Entry price: $74 , $68
Take profit or hold: $96.2 , $104.8
Max expected holding period: 18 months , 24 months
Profit: 30% , 55%
I`ll buy the stock as soon as it crosses $68. Good luck!
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