For the long term investor there are some simple staples to follow to 10%+ annual growth. This is one of those companies that fits nicely into the category of long-term snugness with low relative risk and moderate upside potential.
This is why I like VCO:
ROE is just 10%+ and OM is just under 15%
Comparable P/E to other profitable companies in the industry
Vertically integrated - unlike a lot of wineries they handle every aspect of the process, from growing right up to marketing and distribution networks
Low volume - only around 8,000 shares traded daily on average - long-term studies have shown that if you picked 10 high-volume stocks and 10-low volume stocks you'd end up with about 3% higher returns annually from the low-vol ones. But that's just icing on the cake.
Small institutional ownership - only 3.2% held by institutions right now, and very high inside ownership. a good combo because if a couple of analysts dig this one off the back burner speculative money does wonders for a stock's proce
Universal product - where in the world can you go and not find wine?
Dividends are increasing - currently the yield is 5.5%
Many of the upper management have been with the company for 15+ years
I feel this is a good long-term hold and $50.00 is a fairly safe estimate for a year's time. Catch a dividend or two in the meantime!
$34.66 (08/01/08)
