Today, Eric Nuttall and Stockchase Insights commented about whether NVEE-Q, SXP-T, GIL-T, SU-T, SOIL-T, CJ-T, CPG-T, PNE-T, PXT-T, BIR-T, FRU-T, WCP-T, GXE-T, BTE-T, CHRD-Q, OVV-T, NVA-T, ERF-T, MEG-T, CVE-T, ATH-T, TVE-T are stocks to buy or sell.
GIL has performed well amid a challenging macro outlook, and is now trading at a 10.5x forward P/E. In the 4Q, GIL’s revenue declined 8% to $720M, missing estimates of $761M and EPS of $0.65 slightly missing estimates of $0.68.
GIL’s management expects margin pressure in the first part of 2023 but expects to deliver strong margin performance for the rest of the year.
The company has executed well on its long-term growth strategy by taking advantage of the vertically integrated models as a low-cost manufacturer to expand production to low-cost labour areas such as Bangladesh.
It does so while continuing to expand its margins and returns on net assets (RONA).
Overall, the company has been executing well on its growth plans, has been increasing dividends, and plans on repurchasing shares over the next few years.
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EPS was 31c, up from 24c the prior year, but short of estimates of 37c.
Revenue was $78.8M, up 19% and matching estimates.
The dividend was raised 17%.
The company plans to focus on cost savings and integration of its acquisitions this year.
With the stock way up YTD and news of the CFO departing, investors decided to take some profits.
The stock remains very cheap and the dividend news certainly indicates management confidence.
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The quarter was a big miss; EPS $1.21 down from $1.61 the prior year and estimates of $1.54.
Revenue $189.8M was higher than the prior year $188.6M but missed estimates of $203.4M.
For 2023, guidance was $5.28 to $5.64 per share (est $5.44), Revenue guidance $878M to $915M (est $881M).
The guidance range vs the stock drop seems out of line here to us.
Management commentary was not that negative going forward.
The 4Q miss scared investors, but with the stock already down we would not panic here.
We think it will be OK, but would not add.
The stock may flatline a bit.
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Does not believe dividend us sustainable given current strip price.
Could take on debt to sustain dividend.
Challenges ahead for the company.
Depends on outlook for natural gas.