Don’t Sell This Winner and Go Away

Written by GSCR Staff   
Thursday, 22 May 2014 07:46

There is no way around the fact that the small cap space has been dismal that past few months. We hold no punches, including throwing them against ourselves, and must admit our Market Monitor picks have not done well. There is one exception.

 

Back in late January we highlighted Libbey Inc. (NYSE – LBY - $25.88). Though the pick was not sexy, we believed it was a solid play in a slowly expanding economy. The stock suffered a slight set-back when as indicated in its Q1 financial results that were largely hampered by the harsh winter, but the stock is nearing the 25% price increase we predicted a quarter earlier. Still the stock is trading well despite the massive sell-off Tuesday. In fact, LBY finished slightly in the green.

 

This market is all about finding growth and share price value. Even with the rise in price level over the last 3 months, the forward P/E is still under 10 and the 5-year PEG is a low 1.1. Even though technical trade is fading in this market, it is still worth mentioning that LBY is a very strong bull in the Daily Moving Average all the way out to 50-days.

 

We still see LBY as a solid play with limited downside on an increase in consumer discretionary spending in 2014 and one that still could run this summer to the high $20’s. 

 

Have a great day!

 

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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