A Good Time to Buy This Cyclical

Article Excerpt

NOVA CHEMICALS CORP. $33 (Toronto symbol NCX; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Extra risk) has moved down in the past few months, mostly due to fears that a slowdown in the economy will hurt plastic prices. Nova also had to temporarily shut down its big plant in Corunna, Ontario due to an accident, which hurt its profits. Nova’s shares now trade at 18.1 times the $1.57 U.S. a share that the company probably earned in 2006. But thanks to a major cost-cutting plan, including merging its money-losing European foam-cup operation with a rival producer, Nova’s earnings could rise to about $3.10 U.S. in 2007, for a p/e of just 9.2. Nova Chemicals is a buy. buy…

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