Key insights
- The author suggests that Whirlpool's stock decline to GFC-era lows presents a buying opportunity for patient investors, given its cyclical nature and history of recovery. The potential for dividend cuts and the uncertainty of a recession temper the bullish outlook, resulting in a slightly negative influence on the broader market due to recessionary fears.
Appliance manufacturer, Whirlpool Corp (WHR) stock price is now scraping levels last seen in the Great Financial Crisis in 08-09. The market was panicked then and it looks the same now. The stock eventually recovered with multi-bagger return in 3 -5 years for the intrepid investors who stepped in. This is the magic of buying panic.
There is no question that the business is asset heavy and deeply cyclical. But that is feature not a bug. It allows a patient investor to buy-in at the point of high pessimism and simply hold for a few years before selling back to the fools who sold it to you in the first place. Plus it pays a decent dividend (though that may be cut). The company has survived many such downturns in the past and odds are it will do so this time too. Also the recession the market fears may not arrive at all. What do you think? https://userupload.gurufocus.com/2052466574807441408.png