Two Great American Companies

Every year Brady Corp (BRC) stock price falls in the first quarter only to recover within the next six months. This is one of the best managed companies in the U.S. At the current price level it is an even better value than it was when I purchased stock in this company in the first quarter of last year. Over the past year the P/E contracted, as the company steadily grew revenue, profits and shareholder equity. Current drop in the stock price is temporary and a good opportunity to get in on BRC.

Pentair Inc (PNR) is a diversified industrial manufacturing company with two operating segments: Water and Technical Products. As clean water is getting more scarce and is being recognized as an underappreciated commodity, stocks of companies involved in all aspects of clean water (treatment, storage, conservation, desalination and resource development) are getting more attention. One of the strongest and oldest companies represented in the Palisades Water Index and the PowerShares Water Resource (PHO) that tracks it is Pentair. The index has fallen 10% since the beginning of this year and PNR, which accounts for approximately 4% of it, is down 15%. This is a good opportunity to buy into a solid company in a great industry.

Disclosure: Author bought BRC @ $30.75 & PNR @ $30.74 on 1/9/08

Comments

[oiltrader]

what does BRC do?? "Over the past year the P/E contracted, as the company steadily grew revenue, profits and shareholder equity"
- It'll be more helpful if you could specific numbers about the "steadily growing" revenue, profits and shareholder equity than just generally writing a recommendation which sounds like a polished tip.

[Jake Berzon]

I wrote about BRC less than a year ago and the story is pretty much the same now. Also, plenty of data on BRC is available from a wide variety of sources. My goal with this note was to bring attention to a good deal temporarily available on the market so that other deal seekers may have the opportunity to explore this opportunity through their own research. (Resources like yahoo finance are free, easily accessible and are a good place to start.) I do not have a goal or desire to tout, scalp or pump and dump stocks - if this is what you are looking for, you should be reading different blogs...

[granger]

Thanks for seasonality observation. BRC is rock solid, I will remeber this in the coming years. Thank you

[Jake Berzon]

This week Brady Corporation announced better than expected results and improved outlook. Its stock completed the first leg of its ascend to a previous high. I took this opportunity to lighten my exposure to the US stock markets, by getting out of BRC on Friday, May 23rd, 2008 at $36.59. My gain is 19.5% (including the April dividend payment and excluding commissions) in just 4 1/2 months.