Brady Corporation (BRC) reported a great quarter yesterday, with record EPS of $1.04 vs. $0.87 last year. The results were well ahead of expectations for EPS of $0.93. Sales were up 6.9% and higher across all geographies and in both the Identification Solutions and Workplace Safety segments. New products and a geographic re-alignment of the sales force contributed to the solid growth.

With the new product pipeline still strong, the company is confident about the current fiscal year. BRC expects full-year EPS of $3.70 to $3.95 a share, or an increase of 5.4% to 12.5% from the current year.

BRC rallied more than 11% higher on Tuesday thanks to the strong quarterly results. I am maintaining my $62 price target for now, which is only 15.7X the high end of earnings expectations. If the company continues its operating momentum, the target could be raised. I am raising my buy under price for BRC to $52.

Last week, Patterson Companies (PDCO) reported in-line fiscal first-quarter EPS of $0.40, vs. $0.32 last year, on a 3.5% increase in revenues. The company also maintained guidance for the current year, expecting EPS of $2.45 to $2.55. However, the stock declined following the earnings report as there was some disappointment that the company did not beat earnings like it did in the previous strong quarter. In addition, while both dental and animal health sales were up overall, there was some disappointment that dental equipment sales declined 6.1%.

However, as the company explained on the conference call, equipment sales tend to be volatile, so I would not read too much into the weak results in the latest quarter. The key things to remember are that Patterson is growing sales, and margins continue to improve. The stock is very cheap at 12X this year’s EPS estimates, and it has a 3.4% dividend yield. PDCO is a buy below $30. My target is $35.75.

There was nothing surprising about Phibro Animal Health’s (PAHC) fiscal fourth quarter, with in-line EPS of $0.38, vs. $0.36 last year, on flat revenues. While the company’s core animal health business was strong, with revenues up 6%, this was offset by weakness in the mineral nutrition business, where sales declined 15%. Guidance for the new fiscal year was somewhat disappointing, with guidance for EPS of $1.12 to $1.27, compared to $1.21 in the just completed year. While operating income should rise this year, it will be offset by higher interest expense due to rising rates. I am optimistic, though, that cash flow will improve this year as the company reduced inventories, and that should lead to lower debt and interest expense in the second half of the year.

Now, what really set the stock back yesterday was the announcement that its Chief Financial Officer Damian Finio would resign effective September 29. While a CFO resignation right after earnings is not a positive development, I think the market is making too much of it, especially since former CFO Richard Johnson will come out of retirement to take over the role on an interim basis.

I think the stock will recover in time. Given the impact of higher interest rates on the company’s earnings and valuations in general, I am lowering our buy under price to $15 and our target to $18. The 3.3% dividend yield remains attractive.