Earnings Cheat Sheet: WD-40 (WDFC) Proves That Slow And Steady Can Still Win The Race
The WD-40 Company (NASDAQ: WDFC) is a consumer products company dedicated to delivering solutions to a variety of the maintenance needs of on-the-job users. Its products are sold around the world, headlined by the WD-40 product line but also including popular brands like 3-IN-ONE.
WDFC sports a 2.74% dividend and has beaten analyst estimates in seven out of the past eight quarters.
Earnings: WDFC reported Q4 earnings of $6.9 million ($0.41/share), down 9.2% year-over-year vs. 4Q09 earnings of $7.6 million ($0.46/share).
Revenue: Up 3.8% year-over-year to $80.7 million.
Actual vs. Wall St. Expectations: WDFC beat the Street on both earnings and revs, as consensus estimates were looking for $0.38/share on $76.5 million in revenue.
Notable Stats: Gross margins fell to 50.7% from 51.6%, but stayed above management’s 50% target. Revenue was up in all regions, with a 2% increase in the Americas, representing 46% of all revenue. Sales of multi-purpose maintenance products, which includes the iconic WD-40 brand, were up 7%.
Did You Hear That? CEO Gerry Ridge noted that, “this past year was the best in our company history and, while the gradual stabilization of the global economy has helped, our success is primarily due to our tribe members’ unwavering focus and exceptional execution of our key strategic initiatives.”
Technicals: WDFC has put together a very strong chart over the course of the past 18 months or so. Shares have maintained a single trend-line all the way from $24 to nearly $40, successfully testing the trend many times along the way. Shorter-term, shares recently broke above resistance in the $36.50 range and are set to open up Monday above their September 2008 highs for the first time since the downturn.
Comment: Stocks like WDFC remind us that, even in today’s Hi-Freq dominated investing landscape, slow and steady can still win the race. When the stock opens on Monday, it will be trading up nearly 27% YTD on top of its near-3% dividend.
Given the stock’s tendency to pull back to its trend-line following advances to new highs, now may not be the best time to open up a new position in WDFC, but it is nonetheless unquestionably a stock worth watching and worthy of your investment consideration.
Disclosure: No holdings in WDFC.