| Stock (Symbol) | Stock Price | |
CaesarStone (CSTE) |
$45 |
|
| Data is as of | Expected to Report | Sector |
June 2, 2014 |
Aug 04 – Aug 08 |
Retail & Travel |
| Sharek’s Take | ||
 Note: Today, 8/6/14, CSTE reported earnings, but I am doing this research report using last qtrs data as I need to wait a week before analysts can fully update their projections.Today I will purchase CaesarStone (CSTE) for the Growth Portfolio. CaesarStone manufactures quartz slabs, which are then refined into kitchen counter tops as well as vanity tops, back splashes, tiles and stairs. “Quartz is cheaper & less prone to stains & cracks than granite” — said CSTE’s CEO in a 2012 interview. The company is based in Israel and is building/expanding a manufacturing facility in Georgia. This new facility will alow the company to do more production in the U.S — and it’s getting the sales from a new relationship with all 38 IKEA stores located in the states. A superior product, expanded production and more sales channels should be a big boost to sales and profits in the coming years. |
||
| Just One-Year Chart | ||
 CSTE has done well growing profits, and other than the +9% quarter, this chart looks good. I personally think the Est LTG of 17% is too low and that the company is a 20% to 25% grower long-term. With a current quote of $48, the stock’s selling for 22 times earnings. |
||
| Earnings Table | ||
 Profits for the first quarter of 2014 rose 22% on a 24% gain in sales. Sales are expected to climb 21% in 2014.CSTE missed estimates by a penny in Q1, that sent the shares down and made me concerned, which is why I waited to buy until CSTE reported Q2 earlier today. Annual Profit Estimates recently took a dip in 2014, but rose for 2015 & 2016. Quarterly estimates look good overall, and I feel CaesarStone will put out +20% profit growth quarters on a regular basis for years to come. |
||
| Fair Value | ||
 CSTE was a hot stock before cooling off last quarter. As I write this article, the stock’s selling for $48, up $5 on the day. I think CaesarStone will be $70 next year, but higher sales at IKEA and more production at the U.S. plant could push profits over estimates. |
||
| Ten-Year Chart | ||
 CSTE has been a stock market leader since it came public in March of 2012. Notice the high on the stock was $60. Now that CSTE has beaten the street in Q2, the stock should be able to eclipse this all-time high. |
||
| Power Ranking | Bottom Line | |
Growth Portfolio
12 of 25 |
I’ve been looking forward to buying CaesarStone for months, and today I’m taking the opportunity. The wider use of quartz should help this company grow at 20% to 25% a year for the long-term, and now that the stock is up on better than expected results, the stage is set for CSTE to resume its uptrend. |
|
Aggressive Growth Portfolio
N/A |
||
