Performance wasn't terrible, but you need something a little better than "not terrible" to maintain a healthy valuation. Sales were up about 3%, though both gross and operating margins were lower for the quarter. Perhaps more troublingly, the perpetually problematic industrial/environmental business just isn't coming along as well as management (or shareholders) would like.
Making matters worse, it seems that CLARCOR has a deadbeat customer on its hands. The company had an agreement with EDS's
Aside from all this noise, I'm struck by a basic fact. Other industrial-filtration companies like Donaldson
Apart from my belief that spelling out a company's name in capital letters is pompous, I've got nothing against CLARCOR. As always, my gripe is about valuation. I'm not overpaying for a company in this kind of business, even if it is well-run and sports a strong return on capital. With unimpressive growth seemingly blanketing the sector, I'm in no rush to change my mind or pump up my estimates of future growth.
For more finely filtered Foolishness:
- Pall Still Looks Clogged
- No Donaldson Discount
- CLARCOR's "S.O.L.": Strong Operating Leverage
- Dirt Cheap Dream Stocks
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).