Click Here to Go Directly to the Story
Register/Subscribe
Home

 
 


U.S. EDITION
Full Table of Contents
 Cover Story
Special Report
Editor's Memo
Up Front
Readers Report
Corrections & Clarifications
Letter From Wyoming
Books
Technology & You
Economic Viewpoint

Economic Trends
Business Outlook
News: Analysis & Commentary
In Business This Week
Washington Outlook
International Outlook
Management
Science & Technology
Developments to Watch
Government

Information Technology
Social Issues
Finance
Sports Business
The Corporation
People
The Workplace
BusinessWeek Lifestyle
BusinessWeek Investor
The Barker Portfolio

Inside Wall Street
Figures of the Week
Editorials


INTERNATIONAL EDITIONS
International -- Int'l Cover Story
International -- Readers Report
International -- Corrections & Clarifications
International -- The Conflict
International -- Asian Business
International -- European Business
International -- Latin America
International -- Economics
International -- Int'l Figures of the Week
International -- Editorials


NOVEMBER 26, 2001

INSIDE WALL STREET

CDI Sniffs an Upturn

 
By Gene G. Marcial
Gene Marcial

  STORY TOOLS
Printer-Friendly Version
E-Mail This Story

Related Items Chart: A Prompt Rebound
INSIDE WALL STREET

 CDI Sniffs an Upturn

An Enticing Aroma from Panera Bread

Genentech Passes Some Tough Tests

 Inside Wall Street Archive

With unemployment on the rise, this is a bad time to get into the job-placement business, right? So why is Big Board-listed CDI (CDI ), which supplies techies to the blue chips, shooting up? Between Sept. 2 and Nov. 14, shares rose from 11 to 17.25--a 54% climb. Yet business has been terrible: In the third quarter, revenues were 19% below last year, and CDI posted a loss. And some analysts expect worse in the first half of 2002.

But value investor Mark Boyar, who has accumulated 147,500 shares, argues that staffing outfits are often the first to catch a whiff of a coming turnaround. The stock market usually presages an economic upturn six months ahead--and shares of CDI may be doing just that: forecasting a recovery in the next couple of quarters. Boyar insists that CDI will surprise investors with an earnings rebound in the first or second quarter. "This is one reason why CDI is moving up," says Boyar.

There is another factor behind the stock's buoyancy: a potential buyout. CDI Chairman Walter Garrison, 75, who owns 8.7% of the stock, is said to be inclined to sell the company once it gets back on its former growth path, says Boyar. Insiders control 40% of the equity, he adds, which would be worth twice its current price in a buyout. "We don't believe that keeping CDI in its current form is of critical importance" to Garrison, says Boyar. "More likely, he simply wants to see his personal fortune return to levels reached in 1998"--when CDI was trading somewhere in the 40s. New CEO Roger Ballou has been cutting costs to boost profitability. Garrison did not return calls for a comment.


By Gene G. Marcial
Get BusinessWeek directly on your desktop with our RSS feeds.XML

Add BusinessWeek news to your Web site with our headline feed.

Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video.

To subscribe online to BusinessWeek magazine, please click here.

Learn more, go to the BusinessWeekOnline home page
Back to Top

NOVEMBER
 [an error occurred while processing this directive]


Copyright 2001, Bloomberg L.P.
Terms of Use | Privacy Policy

Media Kit | Special Sections | MarketPlace | Knowledge Centers
Bloomberg L.P.