Great company and a great chart, Rubbermaid
The containers and storage products offered by Rubbermaid are sold by the billions. Without them, last weeks dinner would go straight to the trash and our pencils and pens would be without a container. It should come to no surprise that Rubbermaid is a great play against recession, its earnings are solid through sales of plastic containers and other products such as vacuum cleaners.
If anything is certain, its Rubbermaid’s bottomline which is something that can’t be said for most companies in today’s economic environment. At 11.5 times next years earnings, there happens to be a great bargain in the plastic products company. High energy prices may be cutting into its profits, but for the long term, this is a great brand to hold on to. Even better is that I’m looking for a 50% run in the next couple years.
Both the fundamentals and technicals are aligned for this one. Newell Rubbermaid is selling cheap with a 1.34 PEG ratio and a stock price that is off 33% from highs last January. Short interest on the stock is at lows as well, as investors are preparing for a run up. I like companies that have a strong name and are cheap just for being cheap, there isn’t much reason for the 33% drop in just a year and a half.
Good entry here at less than $20. NWL is sure to rally back to near $30 within the next two years to complete the current trend. At this price, NWL is a great buy, even at $30 the long term potential looks great. Options are surprisingly cheap even just 7 months out to December.
