Friday, December 30, 2011

Whirlpool For 2012

If you believe in a housing recovery in 2012, then Whirlpool should be of interest to you for multiple reasons:

  • It has a 4.23% dividend. This fact can act as a nice cushion to your risk control strategy.
  • If you are a fan of correlation coefficient trading, now is the perfect time to buy. Normally, WHR has a near perfect correlation with the XHB (housing sector), however, right now that correlation has temporarily reversed, thus creating short term value. Check the chart below.
  • Any recovery in housing during 2012 will benefit Whirlpool.
  • WHR is currently trading at a 0.85 price to book ratio.
  • Throughout November, insiders were buying the stock.

Happy Trading in 2012!