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Helen of Troy: A Stock to Launch a Thousand Buyers?

I enjoyed reading your article but your analysis falls short. Their last quarter surprised on the upside, but their earnings have been on a flat to down trend since 2005. It currently trades at 7x PE, but that isn't that cheap if you consider that they are expected to grow earnings by 8% in 07/8 and 6% in 08/09. 1xPEG seems reasonably valued especially considering how many headwinds the US consumer is facing - if oil prices can come down, this company should definitely benefit, but that's a big if.

"Valueline estimates they will have $30 a share in sales by around 2010 and $2.80 in profits." These numbers are very ambitious on the earnings line. They are expected to make $1.70 in 07/08. $2.80 in profits implies a 13% earnings growth rate if they are to hit that target by the end of 2011 and an 18% growth rate if they make it by the end of 2010. If they can grow at that rate, I'd be very very surprised.