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If the severe inventory slashing at Brunswick (BC) is any indication, the coming inventory...

If the severe inventory slashing at Brunswick (BC) is any indication, the coming inventory bounce could be spectacular indeed.
Comments (4)
  • obamaphobe
    , contributor
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    Balance that against the demand for the products. The retailers are not ordering any inventory and containers full of product are sitting at half price and are not moving.
    6 Aug 2009, 11:24 AM Reply Like
  • coloneldebugger
    , contributor
    Comments (885) | Send Message
     
    I'm sorry, your non-blowing sunshine up the public's ass comment is inappropriate.

     

    On Aug 06 11:24 AM obamaphobe wrote:

     

    > Balance that against the demand for the products. The retailers
    > are not ordering any inventory and containers full of product are
    > sitting at half price and are not moving.
    6 Aug 2009, 11:32 AM Reply Like
  • Schweizer
    , contributor
    Comments (276) | Send Message
     
    Railfax shows absolutely no increase in loaded rail units week-over-week, so this inventory build-up idea is not showing up where it would show up.

     

    "Could be spectacular." - come on now.
    6 Aug 2009, 11:40 AM Reply Like
  • Cesar Valencia
    , contributor
    Comments (35) | Send Message
     
    Let's do some basic analysis on BC to see if this makes any sense. Revenue dropped from 1.485 Billion to 718 million YoY, and from 737 sequentially. Q2 is BC's strongest quarter for revenue, so lower sales should be expected for the next couple of quarters. At the same time, inventories have fallen from 922 million in Q2 08 to 580 million in Q2 09 and AR have gone from 604 in Q2 08 to 405 in Q2 09.
    So a year ago AR + I was 103% of sales, while today they stand at 137% of sales. Q2 of 08 was the second biggest quarter ever for BC, trailing only Q2 of 07. What I would take from this is that BC is adjusting inventories to new demand levels. They still don't know where demand is going to be at but it will be lower. If demand comes back, they will need to ramp up production. These are two very different arguments (if demand comes back to previous levels we will have to ramp up production vs. demand WILL come back to previous level and we WILL HAVE to ramp up production). You can't forecast a V shaped recession based on the argument contingent on a V shaped recession.
    6 Aug 2009, 01:19 PM Reply Like
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