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Maytag a 'Strong Buy?' Its CEO Must Think So

March 30, 2000|Bloomberg News, Times Staff

Is Maytag Corp.'s broken-down stock about to get repaired?

The stock (MYG) climbed $2.50 to $32.81 in Wednesday's NYSE trading after the third-largest U.S. appliance maker was reiterated "strong buy" by analyst Nicholas Heymann at Prudential Securities, who expects it to reach $58 within 12 months. Even with the bounce, the shares are off 32% this year.

One investor who certainly wouldn't mind Prudential's prediction coming true is Lloyd Ward, the Newton, Iowa-based company's chairman and chief executive, who snapped up $820,000 of the stock as it dropped to its lowest level in almost three years.

Ward bought 30,000 shares of the maker of Maytag, Jenn-Air and Magic Chef washers and ranges Feb. 17-18 at $26.50 to $28 each, according to the Washington Service, which tracks insider buying and selling. Three other executives also bought stock last month.

Maytag shares have lost more than half of their value since Ward took charge in August, as the company twice warned that earnings would miss forecasts. Ward's purchases may indicate that he expects Maytag to rebound as it focuses more on selling high-price appliances and vacuums, observers said.

"He could see something that could return Maytag's stock to its former lofty heights," said analyst Dean Hernandez of Dover Partners Inc.

The February purchase was Ward's biggest at Maytag, according to the Washington Service. The executive, who has been with the company since 1996, declined to comment on the transactions.

With his bullish outlook, Prudential's Heymann has been almost as lonely as the repairman featured in Maytag commercials. Six of the 10 brokerage analysts who cover Maytag rate it "hold"--a weak score by Wall Street's rah-rah standards. Prudential has the only "strong buy" recommendation.

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