Profits at anchor

Mar 1st, 2010 – Comment

Until there is mounting evidence that the consumer has the confidence needed to go out an buy apleasure craft and that operators are willing to spruce up their facilities, investors may have to live off the seven bagger BC has already brought to the party.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Brunswick2

 

Can you give me an opinion on Brunswick
on the NYSE?

Thanks and appreciation in advance,

Gord

 

Hi Gord,

Your request  for a  post on Brunswick Corp. ( BC NYSE) brings back fond memories from my youth in Flushing, N.Y. when I spent time playing ten pin.  BC is a manufacturer of sports and recreational equipment and has faced some challenges through the Great Recession.

In the most recent quarter reported by the company BC said that they expect to see another operating loss in 2010 although not as bad as in 2009. The big question is will the demand for pleasure craft grow. Boats  manufactured under a number of brand names make up a significant portion of the company’s revenue and the economic environment hasn’t supported robust sales.

The forecast for the bowling and fitness equipment units are expected to see some upside as some operators will have to put a fresh look on their operations to retain and attract users.

 

bc

The three year chart provides a good view of the resistance that is in play at $14.00. The strong advance from the March 2009 lows has taken a breather and justifiably after the run from $2.06! What we can see is that the uptrend has been broken.

 

 

 

 

 bc2

The six month chart provides some indications of the concerns in the market about the performance of BC. The MACD is leaning towards a fall below the signal line suggesting that there could be more weakness in the stock.

The uptrend has been broken. Until there is mounting evidence that the consumer has the confidence needed to go out an buy apleasure craft and that operators are willing to spruce up their facilities, investors may have to live off the seven bagger BC  has already brought to the party.

Happy Capitalism!

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