|
|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads |  |
OCTOBER 6, 2003
A Glow at Yankee Candle  Yankee Candle (YCC
) is not the sort of stock that large-cap value player John Maloney usually goes for. But after a closer look, the president of M&R Capital Management saw the light: In recent weeks he bought 200,000 shares of the small-cap growth company, which operates 278 stores mainly at malls in 42 states. It also supplies Bed Bath & Beyond (BBBY
) and Linens 'n Things (LIN
) Yankee has a 36% share of the $1.6 billion market for premium scented candles. Yankee stock has run up from 14 a year ago to 26 on Sept. 24. Yankee's eye-catching five-year record of rising sales and earnings, plus its strong cash-flow -- about $115 million annually, or $2.20 a share -- make it buyout bait, says Maloney. "We own the shares because of the strong fundamentals," he insists, "[but] you can't ignore the takeover appeal." He thinks it's worth 33 on fundamentals and 40 in a buyout. The solid cash position has let Yankee buy back shares, notes Maloney. It repurchased $9.8 million worth of stock, at about 23 a share, in 2003. Same-store sales dropped in the first half of 2003 but should bounce back in the second half, predicts Douglas Lane of Avondale Partners, who rates the stock "outperform." Yankee expects to open 43 further stores in 2003, and new alliances with other major outlets are possible, says Lane. He expects earnings of $1.40 a share in 2003 and $1.68 in 2004, vs. $1.17 in 2002.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.  By Gene G. Marcial
BW MALL
SPONSORED LINKS
Get BusinessWeek directly on your desktop with our RSS feeds.
Buy a link now! Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
 Copyright 2003, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Policy |
Printer-Friendly Version
