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One industry that is literally stinking up the joint is the funeral
services industry. A large funeral service company, Loewen Group,
Inc., recently filed for bankruptcy and the rest of the companies in this
industry have taken a financial nose dive. It seems the problem is
no one is dying anymore. In most areas of the world life
expectancy is rising and infant mortality rates are declining. A
morbid future for a morbid industry? Although not for the faint of
heart, there may be a silver lining in the current funeral industry
mayhem. A review of Service Corporation International (SRV)
indicates that this company is the largest funeral services company in
the world, and a member of the Standards & Poor 500 Index. From a 52-week high of
almost $40 per share, this stock has fallen more than 75 percent to
a recent high of about $7 per share. Certainly there are
reasons for this poor performance. Earnings have stalled, a recent
merger was not smooth, and the current outlook shows little
improvement. However, if you factor in that over 75 million people
in America are approaching retirement age, you can begin to see that over
the long term you could earn a fair profit by buying this company at
the current bargain price. Purchasing SRV now would certainly qualify as speculation; however,
patient, aggressive speculators could be well rewarded if any
improvement in the company's current condition occurs. |
