There aren't many of us who can claim to have the problem of too much cash lying around. For me, finding a few exciting ways to spend some spare bucks would be a piece of cake. But when you're a public company, there are those pesky shareholders to consider. With good reason, they expect management to put extra cash to its best ultimate use. That's the quandary Claire's Stores (NYSE:CLE) is facing.

First, let's look at the first-quarter results released on Thursday. As expected, they look pretty good. Revenues increased 7.5%. Earnings per share were also up 7% to $0.30. That beat analyst expectations by $0.03 per share, and is a very respectable performance going up against an exceptional first quarter last year when revenues grew 17% and profits leaped forward 78%.

Digging a little deeper into the P&L uncovers no material problems. Gross margins were down slightly on promotions to clear inventory after a softer than expected holiday season, but that was largely offset by a little SG&A leverage. Inventories ended the quarter in good shape, growing at about the same rate as sales.

The company is the leader in its niche -- value-priced fashion accessories for pre-teens through young adults. It competes in the U.S. directly with Too (NYSE:TOO) and Wet Seal (NASDAQ:WTSLA), although lots of big-box retailers carry the same type of merchandise and accessories are plentiful at clothiers Abercrombie (NYSE:ANF), Aeropostale (NYSE:ARO), and Hot Topic (NASDAQ:HOTT).

What's the problem? The company has been too successful. It has grown to 3,013 stores worldwide, and there aren't many enticing new markets to enter. Store count is growing at about 2% per year, and normal same-store sales growth is expected to be in the range of 2%-4%. Barring an explosion of worldwide demand for juvenile jewelry, you have a company that is likely to grow in the upper-single-digit range.

Cash flow has been exceptional over the past three years, averaging $130 million per year. Available cash now stands at $316 million, over $3 per share, and continues to climb. The company has no debt. What I wouldn't give to be in the same position.

So what's a well managed, slow-growing cash cow to do? Start buying back shares, increase the dividend, take a walk on the wild side and make a big acquisition? Claire's has brought in some pin-striped consultants to help figure it out. Their strategic review started a few months back and is expected to wrap up around the end of the second quarter.

Is Claire's worthy of a buy at today's price of around $23? I think the stock is a little undervalued. Projecting cash flows into perpetuity with a 5% growth rate and discounting at 9% yields about a $35 per share value. Give that a 25% haircut for some uncertainty as to how sustained the teen jewelry market is, and you're left with around $26. So the stock looks to have some upside potential, but I would wait another quarter to see what the suits decide.

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Fool contributor Timothy M.Otte has a teenage daughter who thinks Claire's is the cats meow. He welcomes comments on his articles, but doesn't own the stock of any company mentioned in this article.