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ITW, RKT, UNP, CNI, DE, KNOL, Metal Products Stocks Undervalued

^{Published on 2011-04-27 06:12:04 - WOPRAI}
 

April 27, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Metal Products sector and these stocks are the most undervalued as of today. ILLINOIS TOOL WORKS (NYSE:ITW), ROCK-TENN COMPANY -CL A (NYSE:RKT), UNION PACIFIC CORP (NYSE:UNP), CANADIAN NATL RAILWAY CO (NYSE:CNI), DEERE & CO (NYSE:DE), KNOLOGY INC (NASDAQ:KNOL) are all expected to go Up as they are Undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     ITW        ILLINOIS TOOL WORKS                 $57.73         $70.49         18.10% Undervalued          Metal Products         
     RKT        ROCK-TENN COMPANY -CL A             $71.51         $87.14         17.90% Undervalued          Paper                  
     UNP        UNION PACIFIC CORP                  $99.98         $121.60        17.80% Undervalued          Transportation         
     CNI        CANADIAN NATL RAILWAY CO            $74.59         $90.41         17.50% Undervalued          Transportation         
     DE         DEERE & CO                          $97.00         $117.37        17.40% Undervalued          Machinery              
     KNOL       KNOLOGY INC                         $14.92         $18.03         17.20% Undervalued          Telecomm               

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

ILLINOIS TOOL WORKS (NYSE:ITW) - Illinois Tool Works Inc. manufactures a range of industrial products and equipment worldwide. The companys Transportation segment offers metal and plastic components, fasteners, and assemblies; fluids and polymers; fillers and putties; polyester coatings, and patch and repair products; and truck remanufacturing and related parts and service. Its Industrial Packaging segment offers steel and plastic strapping and related tools and equipment; plastic stretch film and related equipment; paper and plastic products that protect goods in transit; and metal jacketing products. The companys Food Equipment segment provides warewashing, cooking, refrigeration, and food processing equipment; and kitchen exhaust, ventilation, and pollution control systems. Its Power Systems & Electronics segment provides arc welding equipment; metal arc welding consumables; metal solder materials for PC board fabrication; equipment and services for microelectronics assembly; electronic components and component packaging; and airport ground support equipment. The companys Construction Products segment offers anchors, fasteners, and related fastening tools for wood, metal, and concrete applications; metal plate truss components, and related equipment and software; and packaged hardware and other products for retail. Its Polymers & Fluids segment provides adhesives, chemical fluids, epoxy and resin-based coating products, hand wipes and cleaners, and pressure-sensitive adhesives and components. The companys Decorative Surfaces segment offers laminate for furniture, office and retail space, and countertops; and laminate flooring and worktops. In addition, the company offers plastic reclosable packages and bags, and consumables; plastic and metal fasteners, and components; foil and film products; product coding and marking, paint spray, and static and contamination control equipment; and swabs and mats. The company was founded in 1912 and is based in Glenview, Illinois.

ROCK-TENN COMPANY -CL A (NYSE:RKT) - Rock-Tenn Company manufactures and sells packaging products, recycled paperboard, containerboard, bleached paperboard, and merchandising displays worldwide. The companys Consumer Packaging segment offers folding cartons for packaging applications; express mail envelopes for the overnight courier industry; coated recycled and bleached paperboard for folding carton and other paperboard product manufacturers; and market pulp. This segment employs printing technologies, and supports customers with new product development, graphic design, and packaging systems services. Its Corrugated Packaging segment manufactures linerboard and corrugated medium, corrugated sheets and packaging, and preprinted linerboard for industrial and consumer product, and corrugated box manufacturers; converts corrugated sheets into corrugated products; and provides structural design and engineering services. Rock-Tenns Merchandising Displays segment produces temporary and permanent promotional point-of-purchase displays for consumer products companies; offers contract packing services; and produces lithographic laminated packaging. Its Specialty Paperboard Products segment sells specialty recycled paperboard to solid fiber interior packaging, tube and core, and other paperboard product manufacturers; produces gypsum paperboard liner; and converts specialty paperboard into book cover and laminated paperboard products for use in furniture, automotive components, storage, and industrial products. This segment also offers fiber partitions, such as solid fiber partitions for glass container manufacturers and producers of beer, food, wine, spirits, cosmetics, and pharmaceuticals; die-cut paperboard components; and specialty agricultural packaging for fruit and vegetable markets, and sheeted separation products, as well as sells recovered paper to paperboard, tissue, newsprint, roofing product, and insulation manufacturers. Rock-Tenn was founded in 1936 and is headquartered in Norcross, Georgia.

UNION PACIFIC CORP (NYSE:UNP) - Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, provides rail transportation services in North America. It has approximately 32,094 route miles linking Pacific Coast and Gulf Coast ports with the Midwest and eastern United States gateways, and provides several corridors to Mexican gateways. The company offers freight transportation services for agricultural products, including whole grains and related commodities, food, and beverage products; automotive products; chemicals, such as industrial chemicals, plastics, and liquid petroleum products; energy products; industrial products; and intermodal containers. Union Pacific Corporation was founded in 1862 and is based in Omaha, Nebraska.

CANADIAN NATL RAILWAY CO (NYSE:CNI) - Canadian National Railway Company, together with its subsidiaries, engages in the rail and related transportation business in North America. It provides transportation for various goods, including petroleum and chemicals, grain and fertilizers, coal, metals and minerals, forest products, and intermodal and automotive products. The company operates a network of approximately 20,600 route miles of track that spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico. It serves the ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama), as well as metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth (Minnesota)/Superior (Wisconsin), Green Bay (Wisconsin), Minneapolis/St. Paul, Memphis, and Jackson (Mississippi), with connections to various points in North America. The company was founded in 1922 and is headquartered in Montreal, Canada.

DEERE & CO (NYSE:DE) - Deere & Company provides products and services primarily for agriculture and forestry worldwide. The company operates in three segments: Agriculture and Turf, Construction and Forestry, and Credit. The Agriculture and Turf segment manufactures and distributes a line of farm and turf equipment, and related service parts, which include large, medium, and utility tractors; loaders; combines, cotton, and sugarcane harvesters and related front-end equipment; sugarcane loaders; and tillage, seeding, and application equipment. This segment also offers hay and forage equipment comprising self-propelled forage harvesters and attachments, balers, and mowers; turf and utility equipment, such as riding lawn equipment, walk-behind mowers, golf course equipment, utility vehicles, and commercial mowing equipment; integrated agricultural management systems technology; precision agricultural irrigation equipment and supplies; landscape and nursery products; and outdoor power products. The Construction and Forestry segment offers a range of machines and service parts used in construction, earthmoving, material handling, and timber harvesting, including backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; motor graders; articulated dump trucks; landscape loaders; skid-steer loaders; and log skidders, feller bunchers, log loaders, log forwarders, log harvesters, and related attachments. This segment markets its products and services primarily through independent retail dealer networks and retail outlets. The Credit segment primarily finances sales and leases of new and used agriculture and turf equipment, as well as construction and forestry equipment. This segment also provides wholesale financing to dealers of the foregoing equipment, provides operating loans, finances retail revolving charge accounts, and offers certain crop risk mitigation products. The company was founded in 1837 and is based in Moline, Illinois.

KNOLOGY INC (NASDAQ:KNOL) - Knology, Inc. provides video, voice, data, and advanced communications services to residential and business customers in the southeastern and midwestern United States. It offers approximately 200 channels of digital cable TV, local, and long distance digital telephone service with enhanced voice messaging features, and high-speed Internet access, which enables consumers to download video, audio, and graphic files using a cable modem. The companys video services comprise analog cable service, which include a package of basic programming comprising local broadcast television and local community programming, including public, educational, and government access channels; and the expanded basic level of programming, which include satellite-delivered or non-broadcast channels, such as ESPN, MTV, USA, CNN, The Discovery Channel, Nickelodeon, and home shopping networks. Its video services also include digital cable service, HD channels, and premiums, which include channels of digital programming, basic cable service, and music channels, as well as high definition TV, digital video recorder, video-on-demand, and subscription video-on-demand; and premium channels, such as HBO, Showtime, Starz, Encore, and Cinemax, which provide commercial-free movies, and sports and other special event entertainment programming. The companys voice services consist of local and long-distance telephone services comprising local area calling plans, flat-rate local and long-distance plans, and measured and fixed rate toll packages based on usage. It also provides business voice and data, broadband carrier, and high-speed Internet access services. The company provides its services over its wholly owned 750 MHz interactive broadband network. As of December 31, 2009, its network passed approximately 932,834 homes and had approximately 693,871 total connections. The company was founded in 1995 and is based in West Point, Georgia.

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