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The Stalwart submits: A value based perspective on Yankee Candle Company (YCC) from the down-to-earth and logical blog GroovyStocks:

Massachusetts based Yankee Candle Company (YCC) is a $1.16 billion (market cap) success story. It manufactures and sells branded scented candles, wax potpourri, and other candle products. Candles are a small industry, and arguably an unimportant one, but YCC does dominate with an estimated 40% share. [emphasis added by The Stalwart] The company has a long history of sales and profit growth. ...

The valuation is not bad either. Down 4% on the day, shares trade at a trailing PE of 14.9, a forward PE of 13.4, and an EV/EBITDA of 8x. A $150 million share buyback announced in July may indicate that the company’s Board thinks the shares are undervalued.

We here at the Stalwart would also like to note that the company has generated free cash flow above its net income, and has bought back roughly its free cash flow's worth of stock over the last two full reported years. That's US$100m in both 2004 and 2003. In July 2005, the company declared a US$150m buyback as well according to GroovyStocks. Keep in the mind the company's market cap at only US$1.15bn.

That means in three years the company will have bought at least US$350m of its shares off of such a relatively small value base. This added with a small dividend which is paid seems to add up to quite a cash generator commited to returning bounty to its rightful owners. Management at Yankee Candle seem to be pretty shareholder friendly... their pay packages look reasonable as well.

According to Institutional Shareholder Services, YCC ranks above 98.9% of the Russell 3,000 in terms of corporate governance. (easily found from the Yahoo profile) We realize this is just one perhaps vague data point, but it adds conviction to the above arguement. Yet we admit to be quite new to the company and are open to hearing negative arguments against it.

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Source: Shareholder Friendly Yankee Candles (YCC)