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PPG: Broken Stock or Broken Company?

One positive on a day like Wednesday, when all the averages finished in the red, is that good stocks are being sold as well as the bad, and that gives investors an opportunity to buy solid companies and discount prices.

Example: PPG Industries , the world’s second-largest maker of coatings for cars, airplanes and all kinds of industrial machinery. Despite riding a bull market in chemicals, PPG’s quarter was ignored in the face of Wednesday’s tough action and the stock sent sliding almost 2 percent by the close.

But the report was solid, with PPG beating the Street’s $1.16 a share estimates by 3 cents on better-than-expected revenues. Sales in the emerging markets were up double-digit percentages, further proof this is a strong international business, and the company was able to push through price increases to offset higher raw costs.

So here you have a strong underlying business that’s share price dipped incorrectly, a classic case of what Cramer calls a broken stock, not a broken company. And there’s a respectable 2.6-percent dividend yield, too. His only question is whether or not the run in PPPG, up 78 percent since his June 2009 recommendation, is over. Well, is it? Watch his interview with CEO Charles Bunch to find out.

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