sb,
you and I have already argued ad naseum the "6% growth" rate. Only a short term trader would think of taking one quarter and making it gospel going forward.
Revenue and margin growth were much better than 6% in Q2. Only a very large amount of selling expenses for the launch of YourWare, Country Stores, and TV advertising to "brand" the company created the 6% growth seen in the 2nd quarter. The fact that GTW could undertake all these initiatives and still report 6% EPS growth is not bad in my book. GTW can back off these expenditures and milk a couple quarters if they want. However, I don't see them doing that as, if anything, I am seeing more and more television advertising for GTW. They seem intent on branding the company, which will only prove out over time.
As for sacrificing quality, I would hardly count on one individuals experience. Especially since the poster is a like-minded soul bracing themselves for the "Big Kahuna". In a study just published a few weeks ago, GTW tied Dell for quality out of the box. It's unfortunate that the best the industry can still do is 13% DOA (if I remember correctly, GTW and Dell were 7% and tied for 2nd best).
IMO, GTW has been "on track" with performance for the past 3 quarters. Inventories are way down, cash flow is very good, and initiatives they introduced are now being copied by Dell and others. I don't know what the proper "valuation" for a company in a unsettled global economy is, but I will invest my dollars with the business and not the market.
Kory |
