1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Dr. Paul Price
Dr. Paul Price
Articles (493)  | Author's Website |

A late 'Boxing Day' special -- Black Box (BBOX)

December 31, 2007 | About:

Black Box [NDQ: BBOX] Dec. 31, 2007 close: $36.17 Yield = 0.7%

52 week range: $34.57 - $46.40

BBOX provides technical networking services to businesses in North America, Europe and elsewhere [141 countries total] on a business-to-business basis. They also offer over 90,000 products through catalogs.

Sales and earnings for the FY ending March 31, 2008 should be nicely higher year-over-year. Consensus views are $3.12 and $3.66 for FY 2007 & 2008 although Value Line is more conservative at $2.95 and $3.25 respectively.

Even on VL's lower numbers these shares look quite cheap. Using the lower estimates BBOX is trading at under 12.3X this year's and just 11.1X next year's EPS. Their 10-year median P/E has been 19X and their most recent average annual P/E's for FY 2004 - 2006 were 21.9X, 19.9X and 20.9X.

If Black box shares trade back to just 18X next FY's earnings we could easily see a price of $58.50 or better for a capital gain of over 61%.

Two of our Gurus owned BBOX as of September 30. David Dreman and Ken Fischer held 522,500 and 541,312 shares. Other significant holders were FMR [Fidelity Funds] Dimensional Fund Advisors, AXA Financial and LSV Asset Management with 11.3%, 8.3%, 5.8% and 5.1% stakes.

Officers and Directors have faith, too, holding a combined 10.8% of all shares.

Value Line gives BBOX a B+ financial strength rating and a 90th percentile earnings predictability factor.

Risk? The absolute low prices touched in the turbulent markets of 2006 and 2007 were $35.70 and $34.57...not too far from today's price and with improving fundamentals.

Is a goal price of $58+ reasonable? BBOX shares hit peak prices of $50.40 - $73.30

at some point in each calendar year from 2001 - 2006 and were as high as $46.40 less than two months ago. With record revenues and earnings on tap, $55 - 60 looks pretty likely within 12 - 18 months.


About the author:

Dr. Paul Price
http://www.RealMoneyPro.com

Visit Dr. Paul Price's Website


Rating: 2.5/5 (10 votes)

Comments

Please leave your comment:


GuruFocus Mobile App


User Generated Screeners


ssukumarBURRY PURE
DANGORDONTRUCKING 6-24-16
DANGORDONPROFITABILITY STOCK
jbpaul275Cheap cheap
oconneds16Screen 2
James LiBrexit Banks N Airlines
valueinvestment101-hiller
jbvalueGrowthProfit2
jbValueGrowthProfit1
lucabolgLuca1

Select portfolio(s):

  • Loading...

Why you are interested?

Your selection and notes will be stored in your portfolio.

Login to add portfolio
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK