Shares of Johnson Controls (JCI) were up more than 2% yesterday, February 3, on news that Wal-Mart (WMT) had named Johnson Controls as its sole source provider for its U.S. stores for automotive, marine, motor sport, and lawn and garden batteries Goldman Sachs also upgraded the stock yesterday to neutral from sell.
As of February 4, I’m leaving my target price at $36.27 by July 2010.
Full disclosure: I own shares of Johnson Controls in my personal portfolio.
Don’t you think a P/E of 27 is a bit rich?
One other thing that prompted me to sell now was that the P/E is over 27. Getting a bit pricey for my taste. It would have been great if I’d sold a few days earlier, but my general market indicators hadn’t yet crossed down. They are always lagging, a fact I accept in order to avoid a lot of whipsawing.
All of the moving averages I use as general market indicators turned negative over the last week. As part of a general portfolio trim I sold JCI yesterday @ 28.642. I had about a 9% gain from my buy on Sept. 9 (not that my buy price has anything to do with the prospects moving forward). I figure all this car recall stuff can’t be good for their business short term. The “automotive experience” division looks to me to be an anchor on the rest of the company (as well as batteries for new cars in the “power solutions” division) for the next several months. I figure they must have a lot of time and materials backing up in ready-to-ship Toyota interiors if nothing else. Even if Toyota takes delivery, pays, and stores them, it’s got to affect JCI sales for at least the next month or two.
From JCI website:
Johnson Controls provides automotive seating, interior trim, electronic components and batteries for a variety of Toyota models manufactured in North America, Europe, South America, Japan and Southeast Asia. 2009 marks the 25th year that Johnson Controls has been doing business with Toyota.
Down more than 2% today. More patience needed.
The stock had very BAD time last year. I almost sold it. In fact I even placed sell order several times. At the end, it was simply because I was not willing to take a loss. So I kept it.
Wish I had bought it when you recommended it Jim.. It jumped up immediately when you said to buy it, so I decided to wait, hoping it would fall back down. I missed this train. Good luck to the rest of you for getting on board.
I read about this yesterday and was thinking…Holy Cow, Walmart is EVERYWHERE, even down here in Costa Rica!! woohoooo!