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Hot Stock of the Day - ASH

May 07, 2009

ASH is the first stock we bought after we started our real Short Term Portfolio on February 2, 2009. Our Buy price is $7.92. What can we say about this company? You cannot find any reason not owning it. It is the kind of company which you can buy-and-hold with confidence. The company manufactures and distributes all kinds of special chemicals used by many industry and consumer segments. It also operates a quick-lube franchise under the name of Valvoline Instant Oil Change.

The following table gives its latest 10 years of earning history (or estimates):

2000 $4.08
2001 $5.90
2002 $1.85
2003 $1.46
2004 $5.48
2005 $5.65
2006 $3.30
2007 $3.31
2008 $2.30
2009 $2.30 (e)
2010 $2.51 (e)

If we use 10 as its reasonable PE ratio, the fair value for its stock price should be $25 - $30. In addition, we believe that the estimates for 2009 and 2010 is very conservative. Once the US economy recovers, the company can earn much more. The following Chart showed the trend after our buy. More gains will be seen:

 

   
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