Inside Genpact's So...
Open Question
Thanks for stopping by Dave. I wonder if you have a take on OLN. The talking
point a few weeks back was there is an ammo shortage so it's a buy. But I
wonder if they are hit by a rise in cost of input material for ammo? Is OLN a
buy down here under $11?
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if most of OLN's sales come from the military, the outlook is better than if
most sales come from the retail public, because new sky-high ammo taxes will
make it hard for OLN to pass along much of any cost increases. The motto is: If
ya can't ban guns, just ban ammo instead. If ya can't ban ammo, just tax it to
oblivion.
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Not Dave but I find OLN very attractive here. With a P/E of around 5 and a yield
of over 7% it makes a great long-term play. I wouldn't worry about the dividend
- they've been paying one for over 80 years. Ammo supplies are still tight and
will be for some time to come.
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OLN has a hold with a grade of C-plus from TheStreet.com Ratings. That being
said, they have an awesome dividend yield and a solid ROE. Also, with a P/E
around 6 it looks fairly cheap. TheStreet.com Ratings model is very risk
adverse, so a high hold like the rating on OLN is still a positive for a stock.
I think this looks like a good stock to look at. I don’t know for certain, but
my guess would be that higher input costs would be able to be passed off to
customers, preserving the margin for OLN.
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