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Sunday, 10/31/2004

Drip-or-Treat
By Nich Sheldon
BC - Brunswick Corp

Company Description

Headquartered in Lake Forest, Ill., Brunswick Corporation endeavors to instill "Genuine Ingenuity"(TM) in all its leading consumer brands, including Mercury and Mariner outboard engines; Mercury MerCruiser sterndrives and inboard engines; MotorGuide trolling motors; Teignbridge propellers; MotoTron electronic controls; Northstar marine electronics; Navman GPS-based products; IDS dealer management systems; Sea Ray, Bayliner, Maxum, Hatteras, Meridian, Sealine, Bermuda, Ornvik, Savage and Uttern pleasure boats; Baja high- performance boats; Arvor, Boston Whaler and Trophy offshore fishing boats; Crestliner, Lowe, Lund and Princecraft aluminum fishing, deck and pontoon boats; Attwood marine parts and accessories; Land 'N' Sea marine parts and accessories distributor; Life Fitness, Hammer Strength and ParaBody fitness equipment; Brunswick bowling centers, equipment and consumer products; Brunswick billiards tables; and Valley-Dynamo pool, Air Hockey and foosball tables. For more information, visit http://www.brunswick.com . (Source: Company Press Release)

[Source: Company Press Release]

Reasons to Invest:

This week's Drip of the Week, banked on one tremendous third quarter. In fact Q3 figures ($72.9 million) for this recreational DRIP nearly doubled their previous Q3 figures of $37.9 million. Brunswick Corp (NYSE:BC) raked in $0.75 a share (including a one time tax gain of $0.10 per share), beating the mean EPS analyst estimate by a penny.

Following the more than upbeat earnings announcement, Brunswick raised its 2004 earnings outlook from $2.60-$2.68 to $2.70-$2.75, however the current First Call average estimate for BC's full- year earnings is still set at $2.68 per share.

Furthermore, Brunswick raised their annual dividend allotment by 20 percent to $0.60 per share from $0.50 per share on October 25th. Brunswick's Chairmen and CEO George Buckley noted "The increase reflects the company's strong cash flow and our ongoing objective to enhance value for our shareholders." I am encouraged by the fact that the company is standing behind their products, and making enough money to share it with its valued investors. One cannot be disappointed in an additional 20 percent per year. The dividend is payable on December 15th, to shareholders on record by November 22nd, which leaves us three weeks to get enrolled and start reinvesting!

In essence of BC's Point-and-Figure chart, I note the stock on a Double Top Breakout. Oops I almost forgot to mention that the bullish price object is 99.50. That's right, 99.50. When one considers that BC is currently trading in the mid to high forties, it's easy to calculate that if the price objective is hit we could be harvesting hypothetical gains of over 100 percent.

There is hardly any recent news or future news worth mentioning at this point in time. As I have stated before, the news surrounding our "Drip plans" generally has little persuasion on the long-term trends of our portfolios. I also tried to see if we needed to concern ourselves with Brunswick's closest competitors, but BC's competitors are few and far between, and none of them have market caps in the billions (BC's market cap is 4.48 billion), which is a good sign that BC owns their market.

I am quite optimistic that BC will continue to outperform. For starters, most of the DRIPs featured on our DOTW's have been in regression channels for close to a year (minimum). At times, I pondered questions like, "Has this stock rose for too long? Am I getting involved with this DRIP too late? I am dumping money into a stock that is already overextended?" Any aged DRIP investor knows that jumping on the bandwagon too late is never a good thing, especially when it comes to your own personal finances, or well-being. However, I have featured DRIPs with long-standing regression channels because the fundamentals painted a picture of continued strength in the DRIPs given sector.

So what do you make out of all of this? BC recently broke out of a four-month slump in July. At the beginning of August Brunswick shot higher and started using its simple moving averages as support, as opposed to resistance (as seen in April-July), which has helped to formulate a three-month ascending channel. On that note, I anticipate seeing BC's channel used as support and resistance for a long time to come. The fact that the channel has yet to mature - like most channels do - entices me to believe that we could have found a DRIP in its beginning stages of maturity. I can't wait to watch this stock grow up (GRIN).

The daily chart illustrate a bit of consolidation on the MACD indicator, which is to be expected, especially after the strong boom from Monday-Wednesday. The key thing to note on the daily chart is that the stock has successfully used its underlying moving averages as support for higher ground. It is also important to mention that BC just set a new ALL-TIME high on Wednesday (October 27th, 2004) of 48.60, which bodes well for a continuation of the upward trend.

A quick look at the weekly chart and I note a gain of approximately 15 points in 2003, and to date BC has gained approximately 15 points over the course of this year. I am forecasting 10-20 gains over the next three years, which would mean that BC will more than likely reach its current Point-and- Figure bullish price objective of 99.50 by the end of 2007.

This ends another exciting episode of the DripAdvisor.com Drip of the Week. Stay tuned next week, as we will spotlight another stock worthy of the DripAdvisor.com limelight.

Remember:
Plan your trade, and trade your plan.

Side note: Election Day is just around the corner and I hope that each of you have set aside time to vote (no disrespect to my faithful readers outside of the U.S.). Regardless of what some people say, your vote does matter, especially since the current polls on Talking Heads Television, otherwise known as CNBC and MSNBC, have each candidate at a deadlock. I would also like to wish each of you a Happy Halloween.

Until Next Week,
Nich Sheldon
Editor In Chief
www.dripadvisor.com
questions@DripAdvisor.com

Broker Recommendations

Strong Buy         2
Buy                4
Hold               4
Sell               0
Strong Sell        0

Brokers Covering  10


DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = No
Accept Foreign Accounts: Yes
Temper Enrollment: No

Min/Max Investment = $10-$2,000/Month


Reinvestment Fees - 
Dividend investment fees: $0.00
Cash investment fees: $0.00
Auto reinvestment fees: N/A


Transfer Agent:
Brunswick Corp.
800-546-9420


Corporate Headquarters:
1 N. Field Ct.
Lake Forest, IL 60045
Phone: (847) 735-4700
Fax: (847) 735-4765



 
 

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