Sunday, September 19, 2010

The biggest in the world

Everybody has heard of Whirlpool (NYSE: WHR).  And after they adopted the Maytag man in 2006, Whirlpool became the largest appliance maker in the world.  With $20 billion in annual revenues, whirlpool is trading at just a 10.x multiple, and is an extreme value.  The stock is down 24% over the past two months amid lackluster sales.  The reality is, appliances break.  Efficiencies increase.  Styles change.  People upgrade.  You can't replace a refrigerator with an online version, you have to buy a new refrigerator;  which is why Whirlpool isn't going away anytime soon.  So collect your quarterly dividend (a 2.3x % current yield), and bide your time until Whirlpool rallies (again).

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