Asbestos and the related "aura" of such, and a recent (pre last Q) earnings disappointment sent OWC down below 38. The company feels comfortable with 1997 earnings of about $3.70. During 1998, when a few of their acquisitions start adding to the top and bottom lines, sales are expected to reach 5 billion. OWC is also implementing cost reductions, and are using a "non-replacement" of normal attrition policy to further their emphasis on cost control.
The market OWC serves is basically a "mature" market. Their growth is coming from acquisitions, new product segments, and slight market share gains.
The reason I like OWC so much, is I do not see much downside risk. I like stocks like OWC during "uncertain market conditions".
OWC also has a pretty good history of filling gaps. It gapped down from 38, and I think it is inevitable, that OWC will fill this gap and enter a trading range of 40-50, or at least 38-42, thus "filling the gap".
I have bought at the 36, 34, 32, and 31 ranges. Currently we are seeing a technical resistance at 35.
JMO, Good Trading, LF |
