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04/15/2005 Ceradyne Inc (CRDN)
Costa Mesa, CA based Ceradyne Inc ranked at No 8 in the Forbes' list of top Small Companies in 2004. And for good reason. CRDN has grown phenomenally but steadily from around $3.00 in 2003 to as high as $38.97 at the end of 2004. Currently trading at around $18.80 (04/15/2005), Ceradyne has been on a decline since. Let's look at the bigger picture.
Ceradyne makes Advanced Technical Ceramics, ultra-hard materials, used
in Defense (Body Armor), Semiconductors, Automotive, Orthodontics and
various other industrial applications. Demand for these materials is
extremely strong. The company is diversifying more in favor of
non-defense applications
Ceradyne has fallen in price a great deal of late partly due to the company's statements that changes in Body Armor requirements have led to delays in fulfilling orders, or expectations of lower than expected quarterly results.
However, this seems to be something the company can recover from in the rest of the year. Indeed, the company itself is predicting a record year in 2005. The stock's fall to these levels could well be put down to Investor Sentiment. Growth prospects remain good, and the PEG value is 0.77 with a reasonable (given the 52-week high price) forward Intrinsic Value of $40.29.
Given that the price continues to fall, investors would be well advised to watch for support or a strong reversal out of the downtrend. This could come as soon as next month since the Quarterly Results are to be announced on April 28 2005.
Ceradyne has fallen in price a great deal of late partly due to the company's statements that changes in Body Armor requirements have led to delays in fulfilling orders, or expectations of lower than expected quarterly results.
However, this seems to be something the company can recover from in the rest of the year. Indeed, the company itself is predicting a record year in 2005. The stock's fall to these levels could well be put down to Investor Sentiment. Growth prospects remain good, and the PEG value is 0.77 with a reasonable (given the 52-week high price) forward Intrinsic Value of $40.29.
Given that the price continues to fall, investors would be well advised to watch for support or a strong reversal out of the downtrend. This could come as soon as next month since the Quarterly Results are to be announced on April 28 2005.