Stock in Focus: Carlisle Companies Inc. (CSL) Revisit

I wrote about Carlisle back in May 13, 2008 (http://artiinvest.blogspot.com/2008/05/stock-in-focus-carlisle-companies-inc.html). So let’s take a look at where things are at this point in time.

Carlisle reported their 2Q back in 07/22/08 and here are some of the highlights.

Operation (all figures are Year-over-Year)

Revenue grew 16.8% (738.8 -> 863)

Operating Income grew 6.4% (84.5 -> 89.9)

Net Income rose 1.7% (53.4 -> 54.3)

EPS rose 3.5% (0.85 -> 0.88)

Dividend rose 10% ($0.14 -> $0.155)

Book value rose 4.8% ($17.22 -> $18.04)

Efficiency

Operation margin fell to 10.4% from 11.5%

Profit margin declined to 6.3% from 7.2%

Return on Asset is 2.3%

Return on Equity is 5%

So where is the share price standing as far as valuation? At the close of 9/2/08, Carlisle is trading at $33.75; this is after a 4.2% run for the day. Stock is still deeply discounted based on my metrics of P/Cash Flow. With a trailing twelve months, P/E sits at 17.87, but using the current P/E, Carlisle is trading at 10. P/S is at 0.68, P/B is at 1.79, and P/Free Cash Flow is 13.57.

In addition to some positive figure from the 2Q08, the Dow Theory should retrace 2/3 ($25.70) before another uptrend. The stock closed as low as $25.91 on 7/14/08. The bottom retracement isn’t a true fact that one can pick, but indicates a possible buy point.

Since my purchase of the stock at $31, it has retraced down as low as $24.81. The stock then reverses and begins trading higher shortly after. I am still holding on to my target price of $45. Only time can tell if my analysis was right and if the Dow Theory was correct to pick the bottom.

Disclosure: I currently have a long position

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