Ah, vertical integration -- that sweet siren song of monopoly profits that worked quite well for past titans like Standard Oil and AT&T. It's a seductive idea, and it's one that Aber Diamond (NASDAQ:ABER) is taking a shot at.

In addition to a 40% interest in the Diavik diamond mine, the other 60% being owned by RioTinto (NYSE:RTP), Aber owns 51% of Harry Winston -- a high-end retailer of diamond jewelry.

So far, so good. Aber's sales more than doubled in its fiscal first quarter, helped by a full quarter's contribution from Harry Winston and strong mining results. Operating earnings climbed by about 84%, and earnings per share more than quadrupled, in part because of an unusually large tax amount recorded in the previous year.

Revenue attributable to the mining operations climbed by more than 62% and, by pure coincidence, accounted for about 62% of total revenue. As for operating earnings, mining earnings grew by almost 84% and made up about 97% of the company's total.

Though much smaller, the retail business did all right. Revenue more than quadrupled, and operating earnings more than doubled to just a bit under $1 million. The company did not break out same-store sales figures, but with only eight stores in operation, those figures most likely were, on the whole, rather positive.

Investors considering Aber need to keep a few points in mind. First, diamonds are a commodity, and the selling price of rough diamonds is largely out of the company's control. Second, retail demand sales are sensitive to both economic conditions and consumer tastes, as Tiffany (NYSE:TIF) has learned in Japan. Third, though the company doesn't have a terribly high level of debt (about $220 million vs. more than $420 million in equity), about $140 million comes due in the next two or three years.

Finally, valuation could someday be a bit tricky. While diamond miners are trading at price-to-sales valuations similar to diamond retailers like Tiffany or Motley Fool Rule Breakers pick Blue Nile (NASDAQ:NILE), that hasn't always been the case. In any event, Aber currently trades at about 3.7 times sales -- above the two- to three-times sales range of miners and diamond merchants.

Given the exceptional growth of Aber, that sort of premium doesn't seem ridiculous. This is a stock with above-average risk, but the growth opportunity seems legit, and investors get a nice dividend (just raised to $1 per share, or a yield of 4% at current prices) to boot.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).