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Investment Analysis Clubs / The BMW Method


Subject:  Re: Graco (GGG) Date:  2/10/2007  4:58 PM
Author:  TMFRichDad Number:  20960 of 42344

Hi Denny,

What your analysis fails to account for is that since 1998 the stock has split 3 for 2 on four different occasions.

The $32.91 paid by the company in 1998 is equivalent to $32.91 * (2/3)^4 = $6.50 compared to Friday's close of $40.57.

So the company bought back shares in 1998 at a mere $6.50 on today's share count or 16% of the value of the shares today. Or, it trades today at just over 6.2x what it did in 1998.

I would settle for those kinds of returns and if guaranteed would mortgage the house to do so (kidding). It looks like a very good buy to me.

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