Brady Corp (BRC - Snapshot Report) continues drive estimates higher with another solid quarterly report in November. Analysts are expecting double-digit growth for the next 2 years, but is it too late to get into this Zacks #1 Rank (Strong Buy)?
Brady Corp makes solutions that identify and protect premises, products and people. Some of the products and services included labels, signs, safety devices and printing systems. The company has customers in the electronics, manufacturing, education and medical fields, as well as others.
On Nov 18 Brady Corp announced fiscal 2011 first-quarter results that showed a 21% jump in net income, to $26.3 million. Without a one-time charge that jumps to $28.9 million. Earnings per share came in at 55 cents, 2 cents higher than expected. This was the second surprise in the past 3 quarters.
The quarter was driven by a 3.5% increase in sales, to roughly $330 million. Organic growth and acquisitions played an equal roll in the improvement.
Great Comments from the CEO
Brady Corp's CEO said the company is continuing to grow in all facets thanks to streamlining efforts and other strategic initiatives. As a result, the company raised its full-year outlook for fiscal 2011.
Analysts Follow Suit
All 7 covering analysts polled by Zacks.com raised their full-year estimate for 2011. Forecasts are up a dime on average, to $2.18. This represents a 25% growth rate.
The Zacks Consensus Estimate for 2012 is also up a dime since the release. Projections for next year are averaging $2.43, which would be an 11% increase.
Brady Corp stacks up quite well against its peers. The company has an ROE of 9.6% compared to the industry average of just 3.6%. BRC's 6.8% net profit margin is 6 times higher than the norm for the industry.
Shares of BRC did not move much on the earnings news, but the subsequent earnings adjustments were enough for buyers to start driving shares higher. We still have some room before the 52-week high and given the momentum, I think it is just a matter of time before we see a new one.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service