This Boring Story Should be Solid in 2015 Too!

Written by GSCR Staff   
Tuesday, 16 December 2014 08:07

In yesterday’s Guide we reviewed some of our 2014 picks and made some 2015 predictions. This prompted a review of our 2014 Market Monitor picks looking for something that jumped out us.

Though the Company itself is not latest hot tech stock, Libbey Inc. (NYSE – LBY - $29.80) has been a solid 2014 performer and appears poised to continue a run in 2015. We first featured the stock back in late January at $20.77 and again in May at $25.88. The stock is up 43% since our first highlight.

 

The Company offers glass tableware products, including tumblers, stemware, mugs, bowls, vases, salt and pepper shakers, shot glasses, canisters, candleholders, and various other items; glass bakeware; handmade glass tableware; and other glass products for original equipment manufacturers, such as blender jars and washing machine windows.  Libbey also offers higher end stemware, glassware, crystal, and China.  The Company’s distribution channel includes foodservice distributors, mass merchants, department stores, retail distributors, national retail chains, specialty housewares stores, candle and food packers, decorators, breweries, distilleries, craft industries, gourmet food-packing companies, and floral companies.

 

Last week Libbey announced authorization for the repurchase of up to 1.0 million of its common shares in open market or private transactions at the Company's discretion.  The authorization has no expiration date. This simple act usually drives up share value.

 

LBY still has excellent technical analysis indicators in what has been somewhat of a downtrodden market of late. The stock is currently trading above the 50, 100, and 200 day EMA. A short float of 2.4% also signifies that there are not many doubters. The forward P/E is 11 with a 5 year PEG ratio of 1.25, two great value indications. $24 million cash on hand at the end of 3Q14 is a great sign that the Libbey is managing its cash flow and funding new projects effectively.

 

Low oil prices could help drive some additional consumer spending which should help Libbey meet or exceed revenue estimates of $887 million in 2015, which is nearly 3.5% higher than 2014 estimates and over 8% of 2013 actual sales. We think LBY can steadily to $35 by 2Q15.

 

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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