| Stock (Symbol) | Stock Price | |
CaesarStone (CSTE) |
$60 |
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| Data is as of | Expected to Report | Sector |
December 11, 2014 |
Feb 10 – Feb 16 |
Retail & Travel |
| Sharek’s Take | ||
 Israel based CaesarStone (CSTE) is building a quartz empire, and most of the building is happening right here in the U.S. Sales rose 31% last qtr, with the biggest markets showing the following increases: U.S. (41% of sales) +48%, Australia (25%) +36% and Canada (14%) +27%. CaesarStone manufactures quartz slabs, which are then refined into kitchen counter tops, vanity tops, back splashes, tiles and stairs. Quartz is cheaper & less prone to stains & cracks than granite, and thus is gaining in popularity. The company is making a big push into the U.S. by selling in Ikea stores and is constructing a new $115 million plant in Georgia to keep up with the demand. The 1st line of the plant should be operational in 2015 Q2 with the 2nd line going by 2015 Q4. Things are going so well for CSTE that it not only had the cash flow to build the plant, but also issued a $0.57 special dividend to shareholders in December. I anticipate CaesarStone will rise 23% this year and 54% by the end of 2016. |
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| Just One-Year Chart | ||
 First, the +9% profit growth 2QtrsAgo was due to tough comparisons in the 2013 Q2 period, that’s fine. Estimates show low-20s profit growth coming and CSTE has been either meeting or beating estimates. For 21 times earnings, you get a stock that could compound at 25% a year — pretty good deal. |
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| Earnings Table | ||
 Sales growth was 31% last qtr, up from 30% 2QtrsAgo and 24% 3QtrsAgo. Profit growth was an amazing 62%.And that 62% profit growth was impressive because the company made the most money it ever hard — by a long shot. CSTE made 76 cents, blowing past the old high of 58 cents and beating analyst estimates by 15 cents. Annual Profit Estimates are ticking higher. Little increases here-and-there. Quarterly estimates look good, I think profits will grow 25% this year. The 5% est 4QtrsOut needs time to be revised higher. |
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| Fair Value | ||
 I anticipate CaesarStone will rise 23% this year and 54% by the end of 2016. This company’s products are in demand and production is increasing. |
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| Ten-Year Chart | ||
 This used to be a perfect looking ten-year chart. Until the stock corrected. But that gave us a chance to get in on a dip. Profit growth has been good each year, high rates of growth (bottom). |
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| Power Ranking | Bottom Line | |
Growth Portfolio
15 of 23 |
CaesarStone is in a sweet spot in its life cycle as quartz surfaces are in demand. With a new factory coming in 2015, CSTE will have the ability to meet the demand for many years to come. A decline in the housing market is somewhat of a risk, as 30% of sales are to new homes (55% to remodels & 15% commercial). |
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Aggressive Growth Portfolio
N/A |
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