Report on Brady's Latest Findings Puts Some in a State of Concern
In a recent analysis, we delve into the inventory situation at Brady (NYSE: BRC). Over the trailing-12-month period, Brady's revenue increased by 3.7%, while inventory saw a significant rise of 13.4%.
The article provides a detailed breakdown of Brady's inventory, examining raw materials, work-in-progress inventory, and finished goods. Over the sequential quarterly period, Brady's revenue dropped by 8.3%, and inventory grew by 2.2%. However, the most notable increase occurred in the finished goods inventory, which grew by 5.0% on a sequential-quarter basis and 21.0% on a trailing-12-month basis.
This increase in finished goods may be a warning sign, as it could indicate that product isn't moving as well as expected. Investors should, therefore, check Brady's filings to ensure there's a good reason for the increase in finished goods inventory. A company ramping up for increased demand may increase raw materials and work-in-progress inventory at a faster rate, but a significant increase in finished goods could suggest otherwise.
The author uses a rule of thumb to compare inventory growth to sales growth. In this case, Brady's inventory growth outpaced its sales growth, which is a matter of concern for investors. It's essential to note that the size of Brady's finished goods inventory over the past 12 months and its development compared to sales is not publicly available in the provided data.
For those interested in keeping up with Brady's latest developments, you can add the company to your watchlist to receive the latest coverage. The Motley Fool provides new small-cap ideas every month, backed by a real-money portfolio. Readers can try any of The Motley Fool's newsletter services for free for 30 days.
It's important to remember that the author does not hold a position in any company mentioned in the article at the time of publication. The Motley Fool has a disclosure policy.
In conclusion, the inventory situation at Brady warrants further investigation, especially the increase in finished goods inventory. As always, investors should conduct their own due diligence before making any investment decisions.
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