I have two picks I'd like to bring to the table for discussion Tuesday. The first one is Mueller Industries (MLI). Ryan sent over a good article a week or so back regarding the construction slow down in China and the subsequent drop in demand of construction material (copper in particular). Pat brought up a good point that a drop in the cost of copper would equal profits for companies that use a lot of copper in their products. One company came to mind - Mueller. They are the largest supplier of plumbing and HVAC piping and fittings in the US and the majority their sales are copper pipe and fittings. I would bet that most of the plumbing pipe and fittings in your house are supplied by Mueller. The stock has risen considerably the last few weeks in response to this news regarding china - so we are obviously not the only ones who think Mueller stands to benefit from this. They are already a profitable company to begin with and have solid financials. I would want to see if the price drops off a bit before we get in as right now they are close their 52 week high of $47. If the stocks dips back to around 40, i think that would be an ideal entry point. Mueller is in the same sector as Alcoa, so we would have to look at the exact numbers to make sure we don't overload, but i think its a great opportunity.
The other stock I wanted to bring back to the table was CAT. As you guys know - I've been a big fan of CAT for a while now. Their stock took a little bit of a hit the last quarter with the market slip, but they just announced earnings this week and they killed it. As a result their stock has shot up a bit. They expect to do even better next year as demand for their equipment is expected to rise. Since we have some extra money in the money market - I think now would be good time to put some into CAT. I would wait for a drawback and try to get in below $90 if possible, but I would be happy getting where it stands now as i think the stock will rise going forward.
I look forward to hearing everyone's feedback on Tuesday.
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