Friday Fun Day

Written by GSCR Staff   
Friday, 12 September 2014 06:38

With all of the events occurring on the geopolitical front we thought we should take the opportunity to take a break for levity with a ‘fun’ stock pick.

 

CTI Industries Corporation (NASDAQ – CTIB -$4.21) can offer this merriment. The Company develops, manufactures, and supplies flexible film products for novelty, packaging and container, and custom product applications worldwide. The Company offers novelty products that comprise foil balloons, such as Superloons, Ultraloons, Miniloons, Card-B-Loons, Shape-A-Loons, and mini shapes; latex balloons under the Partyloons name; and toy balloon products consisting of punch balls, water bombs, animal twisties, and other inflatable toy items. It also provides flexible containers for home and consumer use for the storage and preservation of food and personal items, including devices for sealing and evacuating air from such containers; packaging films and custom film products used for food, and other packaging and commercial applications; and printed and specialty film products for medical applications.

 

It primarily serves various retail outlets, including general merchandise, discount and drugstore chains, grocery chains, card and gift shops, and party goods stores, as well as florists and balloon decorators through a network of distributors and wholesalers, and independent sales representatives.

 

The charts indicate support at the $4 level which is just above the 52-week low for CTIB. Analysts’ CAGR estimates of over 10% for top line revenue for FY 2014 and 2015 aid in bottom-line growth. The current 12-month forward P/E is below 9x compared to the trailing 12-month P/E of 52x. The 5-year PEG is also under 1. Finally, the short float is only 0.02%, which is an outstanding indicator of what the Street thinks of CTIB.

 

Awards and deal flow for CTI Industries are part of the story. Earlier this summer the Company’s U.K. subsidiary received the supplier of the year award otherwise known as the Inbound League Champions Trophy 2013 by Asda, a subsidiary of Wal-Mart Stores, Inc. (NYSE – WMT). The Company also launched a college sports balloon program and released a new vacuum seal product over the summer.   Continued product innovation and marketing should only help the stock.

 

Buying CTIB could have you laughing all the way to the bank. We think a 25% price increase by the end of the year is very achievable---not just a hot air prediction.

 

Have a great and fun weekend!

 

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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