Follow Up on Raven Industries

Since I wrote about Raven Industries (RAVN) the other day and its remarkable long-term performance, I wanted to follow up because the company reported its Q4 earnings today.

Raven had a great fourth quarter. Sales and earnings were up 27%. For the year, sales were up 32% and net income rose 42%. This is from today’s press release:

Rykhus concluded, “This past year was another one for the record books. What makes this even more significant is the fact that we accomplished growth in sales and profits during an unprecedented period of reinvestment across the company. We believe these investments will help us sustain our long-term growth track and we could see double-digit profit growth even in this coming year. We’re really just beginning to test the potential of what we can accomplish with our corporate culture of innovation and strong competitive drive.

“While the economic environment remains uncertain, our best defense is to stay focused on our market niches and run profitable businesses. Due to our strong growth opportunities, as well as scaling necessities, we are using cash to invest in organic growth more aggressively than in the recent past. Along with the continued hiring of new people we estimate our capital spending this current fiscal year will more than double last year’s $14 million. We also continue to look for complementary acquisitions. At the same time, our cash management strategy is geared to support continued growth in quarterly dividends.”

I’m not recommending the stock, but I’d love to add it one day to a future Buy List. My point is to show investors that we should concentrate on how well a company is running its business.

Too many investors do what I call “investing at 40,000 feet.” This is when their portfolio is determined by what they think is happening with the Fed or inflation or the broader economy. There are always well-run companies out there doing a good job and Raven is one of them.

Posted by on March 10th, 2011 at 11:55 am


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