Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.


What drove the stock higher Thursday, was the announcement of 1st quarter 2006 results after the close of trading on Wednesday. For the quarter ended October 31, 2005, sales rose 16.1% to $232.6 million vs. $200.4 million in the same quarter last year. Net income climbed 48.3% to $30.2 million or $.60/diluted "Class A" share, compared with $20.4 million or $.41/share in the same quarter last year. In addition, the company raised guidance for the rest of 2006. The combination of a strong earnings report combined with raised guidance was enough, as is often the case, to push the stock strongly higher!

The balance sheet per Morningstar looks adequate if not overwhelmingly strong; showing $80.1 million in cash, and $222.3 million in other current assets, fairly evenly balanced against $160.8 million in current liabilities and $192.1 million in long-term liabilities.

Per Fidelity.com eresearch website on BRC, Brady is in the "Specialty Chemicals" industrial group. Within this group, Brady is priced midway among its peers. At the top of this group is Monsanto (MON) with a Price/Sales ratio of 3.2. This is followed by Sigma-Aldrich (SIAL) at 2.8, Cabot Microelectronics (CCMP) with a price/sales ratio of 2.5, and Brady (BRC), midway at 2.3. Below Brady is Lubrizol (LZ) at 0.7, and Lyondell (LYO) at 0.4.
Going back to Yahoo, we can find that there are 49.34 million shares outstanding and as of 10/11/05, there were 2.70% of the float out short amounting to 1.32 million shares or 5.6 trading days of volume. This looks significant to me!
The company does pay a small dividend of $.52/share yielding 1.40%. In addition, the company last split its stock in January, 2005, with a 2:1 split.
And the chart? Looking at a "Point & Figure" chart from Stockcharts.com:
The graph looks quite nice to me. The stock was trading sideways through much of 2001 and 2002, and into early 2003. After bottoming at $12.50 in February, 2003, the stock has been moving higher steadily, staying above its "support line".
So what do I think? Well, the latest quarter was superb, the company also raised guidance, the Morningstar report looks strong, and the chart is excellent. Valuation is reasonable with a moderate p/e, PEG and Price/Sales. I just am not buying any shares as I haven't received a buy signal with any of my 19 holdings, although KYPH and SBUX are both getting close :).
If you have any comments or questions, please feel free to email me at bobsadviceforstocks@lycos.com.
Bob
Updated: Saturday, 19 November 2005 1:07 PM CST