Tech World: Grainger Showing Investors Great Return on Equity
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September 2, 2008
Grainger WW, (GWW) together with its subsidiaries, supplies facilities maintenance and other related products in North America. The company offers its products through a network of branches, sales representatives, call centers, catalogs, direct marketing media, and the Internet. Grainger operates a network of 600 branches, 17 distribution centers, and various Web sites. W.W. Grainger was founded in 1927 and is headquartered in Lake Forest, Illinois.
Grainger helps customers save time and money by providing them the right products to keep their facilities up and running. Their customers are 1.8 million businesses and institutions in 150 countries. While each customer has a unique facility to operate and a different problem to solve, their customers all share the same requirement: when they need one of Grainger''s products, they often need it right away.
W.W. Grainger has good fundamentals with solid earnings growth and impressive return on equity. The company recently announced that they had sales of $1.8 billion up 10 percent versus second quarter 2007. Net earnings for the quarter increased 8 percent to $113 million versus $105 million in 2007. Earnings per share grew 18 percent to $1.43, versus $1.21 for the 2007 second quarter.
The stock is in an Elliott Wave-4 buy formation, projecting gains into the $98 per share over the next few months. The company does have a liquid options market that currently extend out to April of 2009, allowing the options strategist more than enough time to trade this potential bullish opportunity.
Figure 1: Daily Elliott Wave-4 Buy Pattern for WW Grainger
(Source: Profit Source)
Click here for larger view.
Happy Trading.
Jeff Neal
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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