Spectrum Brands (SPB) Sustains Momentum, Hits 52-Week High - Analyst Blog

Shares of Spectrum Brands Holdings, Inc. (SPB) hit a 52-week high of $97.29 on Dec 22, 2014, before eventually closing at $96.78. The stock has amassed a year-to-date return of 40.3%.

The company has been riding high on its healthy financials, strong fourth-quarter fiscal 2014 performance, focus on rewarding shareholders and efforts to drive long-term growth through acquisitions and expansions.

This diversified consumer product company remains committed to generating solid free cash flow, reduce debt levels and enhance adjusted earnings before interest, taxes, depreciation and amortization in order to boost shareholder value. During fiscal 2014, the company generated record free cash flow of $359 million, beating its own target of at least $350 million and also coming way ahead of its year-ago free cash flow of $254 million. Also, as forecasted, the company reduced its term loan by over $250 million by the end of the fiscal.

Looking ahead, the company expects to generate free cash flow of roughly $400 million in fiscal 2015.

Investors also remain optimistic on the company's robust fourth-quarter performance, wherein both top and bottom lines grew year-over-year. The company reported adjusted earnings of 98 cents per share, up 11.4% year over year, driven by solid performances at most segments coupled with its constant focus on minimizing costs.

Moreover, Spectrum Brands' emphasis on expansions and acquisitions in order to drive long-term growth has appealed to investors. Recently, the company diversified into a new product line by acquiring Tell Manufacturing Inc., which will form a part of its Hardware and Home Improvement Group.

The company's expansion strategy is further explained by its recent decision to acquire The Procter & Gamble Company's (PG) European Pet Foods business, to strengthen its United Pet Group division.

Going forward, amid a tough retail environment, the company remains positive about its future performance. It looks forward to launching additional products in all of its segments in fiscal 2015, developing its online network, achieving cost savings and strengthening its global footprint.

Spectrum Brands carries a Zacks Rank #3 (Hold). Apart from Spectrum, The Kroger Co. (KR) and Colgate-Palmolive Co. (CL) also hit 52-week highs of $64.67 and $70.49 respectively, on Dec 22.