Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, November 16, 2012

Article Excerpt

SHERWIN-WILLIAMS CO., $151.57, New York symbol SHW, has agreed to buy privately held Consorcio Comex, S.A. de C.V., Mexico’s largest paint and coating maker. Comex sells its products through 3,300 stores in Mexico, 240 in the U.S. and 78 in Canada. Sherwin will pay $2.3 billion, including assumed debt, when the sale closes, probably in a few months. This is a big purchase for Sherwin, which has a $15.6-billion market cap (the total value of its outstanding shares). The company held cash of just $55.2 million, or $0.54 a share, on September 30, 2012, so it will likely have to borrow the funds it needs to complete this purchase. That would increase its long-term debt from $969.9 million to around $3.3 billion. Even so, that’s still a reasonable 21% of its market cap. Comex will add $1.4 billion to Sherwin’s annual sales of $9.4 billion. It will also help the company take advantage of rising demand for paint as Mexico’s housing market improves…