Motley Fool Urges Diverse Insights: Mueller Water's Mixed Inventory Trends
The Motley Fool, a renowned investment advice provider, urges investors to consider diverse insights for informed decisions. It offers a free report, '3 Stocks That Will Help You Retire Rich', for those exploring alternative investments. The company recently highlighted Mueller Water Products, a small-cap stock with intriguing inventory and revenue trends.
Mueller Water Products' revenue expanded by 13.8% in the latest quarter compared to the prior-year quarter, while inventory shrank by 24.1%. Over the trailing-12-month period, revenue increased by 9.0%, and inventory decreased by 24.1%. This suggests effective supply chain management and potential steady future stock performance. However, a closer look reveals fluctuations in inventory levels over recent quarters, warranting further investigation.
The Motley Fool recommends a quarterly check of inventory levels to spot potential issues. In Mueller Water Products' case, work-in-progress inventory grew by 11.3% on both trailing-12-month and sequential-quarter bases, potentially indicating increased future demand. However, a sequential quarterly revenue drop of 12.8% and inventory growth of 3.8% could raise concerns. A simple rule of thumb is to compare inventory growth with revenue growth; if inventory grows faster than sales, it may indicate unsold products.
Mueller Water Products shows mixed signals in its inventory and revenue trends. While revenue growth and inventory reduction over the trailing-12-month period are encouraging, recent fluctuations and growth in work-in-progress inventory warrant further investigation. The Motley Fool's suggestion to consider diverse insights and dig deeper into company data is prudent in such cases.
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