Saturday, July 13, 2013

"Robbie Robertson of The Band turned 70 this week! I had to find a stock that would hold up as well as it aged. Had to go with WD-40 (WDFC)"

Dow Jones Industrial Average 15,135.84 (UP) Week ending 07-05-2013

Some things just hold up very well over time. One such thing is the music of 
The Band, which is just timeless. Levon Helm and Rick Danko are gone now and Robbie Robertson turned 70 this week. So to celebrate I watched ,"The Last Waltz", the DVD which celebrates The Band starting with "the hawk," Ronnie Hawkins, passing by Muddy Waters, Joni Mitchell, Neil Diamond and the times on Tin Pan Alley, Eric Clapton, Van Morrison and then on of course to the voice of time itself, mister Bobby Dylan. 

So in order to keep up the reverence for the "tried and true" and come up with something in the atmosphere of the stock market that would hold a candle to a similar test of time, I needed to turn to the stock which is more dependable than duct tape and the Phillips screw driver, that is, I had to go with WDFC, which of course is the very well known brand,

WD-40 Company (Symbol WDFC, $57.78) 

Here is CNBC's description of the company: "WD-40 Company is a global consumer products company dedicated to delivering solutions for a range of maintenance needs of doer and on-the-job users. As of August 31, 2012, the Company's products included WD-40 Smart Straw, WD-40 Trigger Pro, 3-IN-ONE Professional Garage Door Lube, Spot Shot Pet Clean which is a non-aerosol Spot Shot trigger product, Blue Works product line, and a mildew stain remover under the X-14 brand. In addition, its WD-40 Speciality product line, consists of certain specialty maintenance products. The Company's three geographical segments are: the Americas, Europe and Asia-Pacific. During the fiscal year ended August 31, 2012, the Company formed WD-40 Bike Company LLC, focused on the development of a line of bicycle maintenance products for cyclists and mechanics."

I started writing this blog last week and WD-40 has already reporting earnings this week and did well. The stock shot up into the 60s then backed off by the end of the week.

WDFC has a Return on Equity of 21.3% and a PEG ratio of 2.38. The PEG ratio is a little rich, but there are only 15.47 Million shares outstanding of the stock, so a very small float.  The forward PE is 22.48.

The company has tremendous "tried and true" brand recognition on which it is hard to put a measure of financial value.

WD-40 has Zero long term debt. It pays a dividend annually equivalent to 2.10%. The Current ratio of assets to liabilities is 1.78.

2013 earnings per share is looking like $2.39 per share and for 2014 earnings per share looks like $2.61. 

Revenues last year were 353.58 Million $. The newly formed  WD-40 Bike Company should add into revenues with the ever growing promotion in media and popularity of the Tour De France and Amgen bike races.

The addition of WDFC to your portfolio should "lube up" your way to bigger annual stock gains. I like the stock as a stable 2-3 year investment that should give you a slow but steady gain.

Here is the link to the WD-40 earnings report on CBS MarketWatch: WD-40-company-reports-third-quarter-2013-sales-and-earnings   It was a report that made the WD-40 girl smile. 

So since I can't seem to catch up, I am going to take a summer break and start up again in Early September.  A well deserved break I might add.  I think we have had a good year so far.

Catch you later,    Freewilly

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