This is looking like a good pickup to me. A number of things are encouraging about this stock, and I hope I will have time to detail them all in a post. Possibly next weekend.
Here's one nugget, from the Q3 2011 Conference Call:
"Lastly, we continue to feel very confident about our long-term business prospects and our ability to generate cash on a consistent basis. We recently took action consistent with this long-term outlook. We announced the $1.5 billion stock buyback program and a 50% increase on our quarterly dividend. Increased dividends moves our yield up to approximately 2.5% based on our current stock price. Regarding the share buyback, our decision was based on the opinion that the company's current stock price represented a significant discount to the real value of Corning's businesses. We understand the short-term concerns relative to recent macro events. But our board's recent action reflects our belief that long-term value of our businesses is substantially greater than our current share price. We expect to be active in the market, repurchasing our stock very soon."
Share repurchases and dividends are great, especially when you have excess cash and your stock is trading at below 10 P/E and you have no enormous capital expenditures planned. The key is the bolded statement above. I think there should be almost a law that says no company can repurchase its shares unless it has a huge amount of cash and the P/E is below 20 and it is not going to need to raise money soon. Off the top of my head, RIMM, NFLX, and GRMN have all repurchased shares at inopportune times over the last two years. I think this is the perfect time for GLW to repurchase.
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