CCA Industries (NASDAQ-CAW)-BUY Recommendation

CCA Industries (NASDAQ–CAW)
Valuation-$18.36
Price August 4, 2008-$7.00

We recommended CCA back in 2006. Ultimately, we booked a 21% gain on it.

CCA has consistently made money over the years and pays a handsome dividend—6.3% yield.

Last time we recommended CCA it was at $9.45 a share and sold it at $11.50.

They had a take-over offer that never went through.

CCA has 60%+ gross margins and $2.56 a share in cash.

So far this year (6 months ended 5/31/2008) sales were down 3% and net income was down to $.16 from $.25 last year.

So while their sales and EPS performance has been lackluster, their balance sheet and dividend provides good support.

Trading at 38% of our valuation, with $2.56 per share in cash, we think that this one will be bought-out at some point in the double digit price range.

The 52 week low has been $6.61 and the high–$10.25.

HSTM trades about 5,000 shares a day, so be careful buying. We bought a little today at $7.00.

There are about 7.1 million fully diluted shares outstanding.

About CCA
CCA Industries, Inc. manufactures and markets health and beauty aids, each under its individual brand name. The products include, principally, “Plus+White” toothpastes and teeth whiteners, “Mega-T” Green Tea diet supplements, “Mega-T” Green Tea gum and mint products, “Bikini Zone” medicated topicals and shave gels, “Nutra Nail” nail care treatments, “Scar Zone” scar treatment products, “Sudden Change” anti-aging skin care products, “Parfume de Vanille” fragrances, “Solar Sense” sun protection products, “Hair Off” hair removal and depilatory products, and “Wash ‘N Curl” shampoos and conditioners.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s