Before digging into Black & Decker's (NYSE:BDK) fourth quarter report, allow me to circle back for a moment to my Thursday piece on Stanley Works (NYSE:SWK).

It looks like I was too harsh on Stanley Works for blaming its sales shortfall on ordering behavior from large customers, presumably Home Depot (NYSE:HD) and Lowe's (NYSE:LOW). Since Stanley reported, we've heard similar news from TechTronics, and now Black & Decker as well, which suggests that unexpected inventory management shifts from these customers really did make a difference. It doesn't change my thesis on Stanley Works (I wouldn't buy it or want to own it), but it does give credence to the notion that the sales shortfall was out of management's control.

As for Black & Decker, sales were flat in the fourth quarter -- at least in some part because of that aforementioned shift in order patterns. For this company, though, good management saved the day; the operating margin actually improved, and the company posted year-on-year earnings per-share growth (when you exclude unusual tax expenses for repatriation).

As you might imagine, growth in the sales of power tools was hampered by those retail problems, though the DEWALT line did well (double-digit growth). The hardware/home improvement business saw lower sales because of poor performance with locksets, while the fastening and assembly business saw sales rise a bit and segment profits rise by a mid-teens rate.

For now at least (mid-morning on Friday), Black & Decker's stock is responding fairly moderately to the news about the fourth quarter and future guidance. Perhaps that's because the company converts a very respectable amount of revenue to free cash flow, or maybe it's because of the high return on invested capital. Or maybe it's just because the stock wasn't all that expensive to begin with.

Whatever the case may be, I'm adding this one to my watch list. It doesn't take very heroic growth assumptions to come up with an attractive price target, and I'm consistently intrigued by companies with both solid brand value and returns on capital that are well in excess of the cost of that capital. While cheaper imports and customer inventory adjustments may be recurrent threats, I still think Black & Decker has the tools and the talents to succeed.

For more related Foolishness:

Home Depot is a Motley Fool Inside Value recommendation.

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