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Aggressive Growth

Libbey Inc. (LBY) is trading near its 52-week high, yet still shows solid valuations and the growth outlook is fantastic.

Company Description

Libbey makes glass, metal, ceramic and plastic tableware in the U.S. in addition to Mexico, China, Portugal and the Netherlands. The customers range from retail to foodservice and industrial uses.

Estimates Still Surging

The Zacks Consensus Estimate for 2010 is up 33 cents, to $1.12 since its original Zacks Rank Buy feature back on Jun 24. Next year's estimates are up 32 cents on average, to $1.50. Given the $1.47 loss in 2009, LBY looks like quite a turn around story.

A Big Surprise

Much of that spike is due to the quarterly results Libbey released on Jul 29. The company reported EPS of 56 cents, more than double the 27 cents that was expected, giving the company back-to-back surprises and 4 in the past 5 quarters.

Second-quarter net sales rose 3.7% to $203 million, driven by a 29% jump in Mexico. Libbey's net income came in at $9.6 million, up sharply from $2.7 million one year ago.

Valuations

Shares of LBY can be tough to value, which is typical of small cap companies. While the forward P/E of 13 and the PEG of roughly 1.2 are solid, the real value is in the price to sales. Libbey's P/S is coming in at 0.31, which is well ahead of its peers that average about 0.6.

Earnings can be extremely volatile for small cap stocks, so many analysts use a sales valuation as an alternative. The sales picture is usually much more stable, however it does not take into account other key factors like expenses.

The Chart

Shares of LBY are pressuring its 52-week high right now and have a very good chance of pushing through that level, given the strong momentum.

Read the June 24thFeature Here

Libbey Inc.- ticker LBY >
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Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

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