Central European Distribution Corp. [CEDC] Nov. 28, 2008 close $23.64
52-week range: $17.16 (10/24/08) - $77.48 (7/14/08)
With the world falling apart Europeans seem just as dejected as we Americans are feeling. Central European Distribution wants to help you through the night by supplying vodka, beer, wine and other spirits to the Polish population. Business has been booming since 2000 and shows no signs of slowing up. In fact, the last four quarters of actual reported showed year-over-year comparisons of $2.85 versus $1.65 [ + 72.7% ] with the just completed September quarter coming in at a better than forecast $0.87 versus $0.42 in 2007.
Full year estimates for 2008 and 2009 are now running $2.80 and $3.60 making CEDC’s P/E a very low 8.5x this year’s and 6.6x next year’s consensus figures. Unlike most stocks this one hit its yearly high quite recently- CEDC traded at $77.50 in mid-July.
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When times were flush many internet related stocks were in high demand despite outrageously excessive share prices. Now, with the economy in a serious funk, these same companies are trading near their lowest absolute and relative prices ever.
With credit expensive and hard to come by, I’ve narrowed my field to solidly profitable companies with little to no debt and lots of treasury cash. I also want a firm that serves a thriving area of the economy even in today’s depressed state of affairs.
Which former high-flier now looks like a great bargain?
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eBay [NDQ:EBAY] Nov. 26, 2008 close: $13.48
52-week range: $10.91 (11/21/08) - $35.12 (12/11/07)
eBay owns their namesake internet auction marketplace as well as PayPal- their global payment platform and Skype- their net-to-phone communications company. Since coming public in 1998 the sales, cash flow, earnings and book value have all increased exponentially. The shares peaked in late 2004 at a ridiculous price of $59.20 on trailing earnings that year of $0.57 and an absurd P/E of 104x.
Yesterday EBAY shares closed at $13.48 or just 9.3x 2008’s expected EPS of $1.48.
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