Ceradyne, Inc. (CRDN)

mdabat (59.15) Submitted: 6/28/08 10:31 AM : Start Price: $37.40 CRDN Score: 9.63

I think that this stock will increase in value over the long-run. By looking at its past financial performance, we notice an upward trend in various values, such as sales, cash, and margins. The company is enjoying a 5 yr sales growth of 65.40% and a 5 year earnings growth of 106.70%. The amount of total debt in the company has been relatively stable at $121 million, and its good to see that the company can cover their debt using the cash on hand ($185.5 m).

In addition, its net profit margin (18.37%) is the 2nd highest in its industry (after CFSG), its ROE is one of the highest, while its E/P is one of the lowest in its industry.

Such information shows that the company's health, as well as its value are potentially rewarding. To back up such data, i performed a simple Discounted Cashflow Analysis and found the real value of the stock to fall between the conservative value of $44.24, and the optimistic value of $72.12. Such a measurement gives the investor a minimum margin of safety of 30.76%

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