Stanley Works It

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Continued strength across its business lines prompted tools and hardware company Stanley Works (NYSE: SWK) to boost its outlook for the first quarter and all of 2004 yesterday. January and February sales from continuing operations were up 20% year over year, or a still-impressive 15% if recent acquisitions are discounted.

First-quarter organic sales are now seen besting last year's number by a percentage in the low to mid-teens. That should translate to earning per share between $0.63 and $0.67, up significantly even from the company's previous high-end guidance of $0.51.

That number could be even higher should the trends seen in January and February continue. Add that to Stanley's previous guidance for all of 2004 and you've got full-year EPS that stands to come in well ahead of the old high-end estimate of $2.60.

This news probably doesn't surprise current Stanley investors much. The company has performed consistently well over the last year, while also making several key acquisitions and dispositions. (The latest acquisition, security and automated transaction systems company Frisco Bay (Nasdaq: FBAY), was another recent Foolish topic. That deal should close soon.)

Stanley's shares have been sitting near their 52-week high for some time, though, yesterday's sales and earnings news gave them some life. For now, the stock looks fairly valued for several reasons. The stock trades at about 15 times the old $2.60 per share estimate. It forecast a strong 2004 outlook and has a history of powerful cash flows, as well as a nifty dividend. But if Stanley Works' current performance continues, it may not remain that way for long.

Can Stanley keep hammering away? Talk it over on our Stanley Works discussion board.

Motley Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.