I give up on Sherwin Williams and have sold my exploratory position today.
According to the company, earnings will be about $1.88 to 2.03 this year ('02). The predicted earnings gives a p/e about 12-13 (on today's price). Which places the stock near its low avg. annual p/e. (That's a positive, imo.)
I am selling my position because I feel too alone on this one. There's not that much positive on Yahoo, nothing here for a while, and there are those business concerns. These were mentioned previously: competitive issues, the loss of Home Depot account and the lead-related lawsuits. A judge is expected to rule soon in the Rhode Island case, and that outcome may be weighing now on the stock price. (Although imo, lead didn't stop Warren Buffett from buying Benjamin Moore.)
Very roughly, I see that SHW has traded in a range between 20 and 30 during the past few years. (SHW is about 25 now.) I don't know of any factors that might cause the stock to be trading at the higher end, yet there seem to be reasons why it might again trade at its lower points (or even lower depending maybe on lead fears). The dividend yield is okay, not attractive.
All together, I can't figure out why I should continue holding this stock.
Paul S. |
