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Aggressive Growth

Bill Wilton

Lifetime Brands

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Lifetime Brands, Inc. has beaten expectations in each of the past 5 quarters and the most recent surprise has really pointed shares in teh right direction.

Additionally, the valuations and operational metrics are looking great and still getting better for this Zacks #1 Rank (Strong Buy).

Company Description

Lifetime Brands makes branded kitchenware and decor under many brand names including Cuisinart, Calvin Klein, KitchenAid, Farberware and several others.

Earnings 52%

On Mar 10 Lifetime Brands reported fourth-quarter results that included an 11% increase in sales, to $143 million for the quarter. Net income came in at $8.1 million, up from $5.1 million a year ago.

Earnings broke down to $0.63 per share compared to $0.41 in the same period last year. Analysts polled by Zacks were expecting 51 cents on average, making this the fifth consecutive earnings surprise for the company.

Confidence Moving Forward

Lifetime Brands has been pretty cautious up to this point, but is confident enough in the future operations that they have decided to reinstate a modest dividend. While they did not provide specific guidance, that was enough of an indication to push analysts to raise estimates.

Full-year projections for 2011 are up 7 cents on average, to $1.40. Next year's Zacks Consensus Estimate is $1.60. Given the $1.21 Lifetime Brands earned in 2010, expected growth rates are 16% and 14% for the next 2 years.

Valuations Look Good

Shares of LCUT are trading at just 10 times the 2011 consensus, which give them a PEG ratio of 1.0. Both of those figures points to a solid value. The price-to-sales of 0.38 times also looks great.

Lifetime Brands has managed to improve its ROA, ROE, Operating Margin and most other metrics in each of the past 3 quarters, giving them an excellent trajectory moving into 2011.

The Chart

Shares of LCUT received quite a jolt from the recent earnings surprise. The stock was in a down trend and it was looking bleak, but the solid results turned that around. LCUT is now on the upswing and there is still plenty of upside.

Lifetime Brands, Inc.  - ticker LCUT>

 
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Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service

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