Georgia Gulf to Trade Under $1

Tags: ggc
7 Jan 4:50am
Posted by ZacksResearch
0 Comments
Read original blog entry

Georgia Gulf Corp. (GGC) overpaid for the acquisition of Royal Plastics, a supplier of housing products. The acquisition was entirely financed with debt, and the company is in danger of violating debt covenants.

The remaining product lines of the company are suffering from overcapacity. GGC is expected to report losses in the near term on the back of rising feedstock and energy costs. Demand for the company's products is also expected to remain weak due to the downturn in the US housing and auto markets.

Moreover, the company may need to sell its assets to comply with the debt covenants. As a result, we have a Sell rating with a target of $0.80.

Read the full analyst report on GGC



Get real-time market insights and profitable stock recommendations from the team of analysts at Zacks Equity Research. See all today’s Analyst Blog entries on Zacks.com.

Comments

Back to top

Post comment

Back to top

Post a comment

Please login to post a comment

About

ZacksResearch

Zacks Investment Research is one of the most highly regarded firms in the investment industry. Our firm has long believed that that quantitative models (like the Zacks Rank) can predict stock prices more accurately than individual analysts. However we also recognize that models are most effective when they are employed by analysts who have deep fundamental knowledge of the company and its industry. Consequently Zacks Equity Research combines Zacks quantitative models with the insight provided by an experienced team of 50 analysts to create superior long term stock recommendations. Discover all their timely insight and recommendations daily on Zacks.com.

Recent Entries