This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

July 2 - Helen Of Troy Ltd. (HELE-NASDAQ) together with its subsidiaries, engages in the design, development, import, and distribution of brand-name consumer products worldwide. It operates through two segments, Personal Care and Housewares.

The Housewares segment provides kitchen tools, cutlery, bar and wine accessories, household cleaning tools, food storage containers, tea kettles, trash cans, storage and organization products, hand tools, gardening tools, kitchen mitts and trivets, barbeque tools, and rechargeable lighting products.

The company sells its products primarily through mass merchandisers, drug chains, warehouse clubs, catalogs, grocery stores, and specialty stores, as well as through beauty supply retailers and wholesalers. Helen of Troy Limited was founded in 1968 and is headquartered in El Paso, Texas.

You know this company but maybe by different names. In the U.S., it distributes products such as Vidal Sassoon, Revlon, Sable, Sunbeam, Dazey, and Dr. Scholl's to retailers. The Professional Divisions markets products under Helen of Troy, Hot Tools, Salon Edition and Gallery Series. The Home Health Care group sells products under Dr. Scholl's brand.

Revenues dropped slightly in 2008 to $622.7 million. The prior 2 years were $634.9 million (2006) and $652.5 million. Analysts project this year will show a rebound to $650.26 millon, then next year go to $669.04 million. There are 2 analysts following the company.

As for earnings, they followed the same path, showing a slight dip last year to $1.59 after $1.75 in 2007. (In 2006, they were $1.58.) Consensus estimate for this year is $1.73, then $1.91 for 2010. Next earnings call will be on July 9 for first quarter results (fiscal year ends in February). Analysts see 35 cents a share, down from 42 cents in the same quarter last year. For the second quarter, look for 34 cents, equal to the 34 cents of the same quarter in 2008. Analysts estimate annual earnings growth to average 13% a year over the next 5 years.

There were 2 new licensing agreements signed recently, one with Staples, Inc., the world's largest office products company, and one with UCB, a global biopharmaceutical leader. New products, resulting from combined research and development from both parties, have taken two years to perfect and are the result of using the OXO brand's resources and design philosophy. For Staples, one product line is in the office tool group known as OXO Good Grips and has 30 items, available only at Staples. The other product line, formed with UCB, offers rheumatoid arthritis patients syringe and packaging components that are easier to use for those that self-administer their medicine.

The company felt the negative effects of the 2008 retail markets, reporting lower sales and earnings. So it cut back on its overhead, particularly in the selling, general and administrative expenses which will help operating and profit margins going forward. Furthermore, the new alliances with Staples and UCB should add to both the top and bottom lines.

More numbers: Price to Sales is .86. Price to Book is 1.05. Operating margin for the last 12 months was 10.32% while Profit margin was negative 9.12%. Return on Equity was a negative 10.55%. There's $103.25 million in cash that makes for $3.46 a share in cash. Total debt is $212 million which is 21% of capital. Current ratio is 2.3. Book Value per share is $17.03. Beta is a very active 1.71. There are 29.83 million shares outstanding with a float of 25.83 million. Insiders own 6.66%. Institutions have 84.7%. There is no dividend.

HELE's stock price took a strong tumble, starting in the latter part of last year and didn't hit bottom until early this year when it touched $8.55. It's doubled that low number as it rebounded quickly. With growing sales and profits appearing imminent, aggressive investors may want to spend some more time with HELE as it's beginning to look attractive once again.
After all, the company's initials spell HOT.

Company Web site: www.hotus.com

- Ted Allrich