Reddy Ice Gets Cold Comfort

Reddy Ice Holdings (FRZ) is the largest manufacturer and distributor of packaged ice in the United States. The company sells its products primarily under the Reddy Ice® brand to approximately 82,000 consumer locations in 31 states and the District of Columbia.

Earnings were lower than expectations in both the first and second quarters of 2008, and management lowered guidance after reporting each quarter. Also, recently, the Board suspended payment of a quarterly cash dividend.

With the stock's significant price decline discounting most of the negative developments, the stock is upgraded to a Hold. The stock only has a three-year trading history, where the stock mostly traded at a negative P/E. Therefore, the stock is better valued on a P/S (Price-to-Sales) basis. The stock has traded in a P/S range of 0.20 to 2.0. The price target of $3.50 is based on a 0.23 P/S multiple.

Read the full analyst report on FRZ

Read the full analyst report on FRZ