W.W. Grainger Inc. Stock Buy Recommendation Reiterated (GWW)
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- Despite its growing revenue, the company underperformed as compared with the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 7.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- GWW's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.33, which illustrates the ability to avoid short-term cash problems.
- 45.30% is the gross profit margin for GRAINGER (W W) INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.81% trails the industry average.
- Net operating cash flow has increased to $337.89 million or 34.88% when compared to the same quarter last year. Despite an increase in cash flow, GRAINGER (W W) INC's average is still marginally south of the industry average growth rate of 38.97%.
- GRAINGER (W W) INC's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GRAINGER (W W) INC increased its bottom line by earning $9.07 versus $6.93 in the prior year. This year, the market expects an improvement in earnings ($10.60 versus $9.07).
--Written by a member of TheStreet Ratings Staff. HOLIDAY SPECIAL: Let Jim Cramer show you every trade he is making in his $2.5 Million portfolio. Join now for 14-days FREE. Sign up today to get e-mail alerts before every trade
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