Article: Libbey: Better Days on the Horizon

Article: Libbey: Better Days on the Horizon

Originally published in Seeking Alpha

 

Glass manufacturing probably doesn’t seem glamorous or sexy to most people. By association, neither does investing in a glassmaker. However, as one of the largest glass tableware manufacturers in the world, Libbey (LBY) is a powerful player in an often overlooked industry.

 

An Income Investment
On Tuesday, Libbey’s board raised its quarterly dividend by 5%, to 11.5 cents per share. The company says the new dividend will be payable on March 15, 2016, to shareholders of record at the close of business on March 1, 2016. Shares of Libbey, which have seen a stedy decline since the start of the year, saw a slight boost in trading Tuesday on the news, though shares closed at $15.78 per share, $0.06 lower than the previous day’s close.

A Long Bumpy Road
Libbey shareholders haven’t had a smooth journey as of late. Last month, shares hit a new 52-week low, bottoming out at $14.75 per share. Just days earlier, CEO Stephanie Streeter resigned, and the company named William Foley the new chairman and CEO. A few weeks later, Zacks Investment Research downgraded Libbey from a “buy” rating to a “hold” rating.

The (Rocky) Road to Recovery
Things are looking up for Libbey a little though. Just a few days after the downgrade by Zacks, the research company issued an upgrade, returning Libbey to a “buy” rating. More recently, an analyst with Dougherty & Co forecasted Libbey’s Q4 earnings to be $0.37 per share, though this is down from from a previous estimate of $0.46 and lower than the consensus estimate of $0.41 per share. However, Dougherty & Co has rated Libbey a “buy” and has set a bullish price objective of $26, leaving investors with a lot of potential upside.

Bottom Line
Libbey’s investors have been on quite a roller coaster ride, but the future is looking brighter. The company’s CEO may be new to the position, but William Foley takes the helm after serving on the company’s board of directors for two decades. And as a former glass executive, he has over 30 years of experience in the glass tableware and consumer products industries. Glass products may never become glamorous or sexy, but with shares of Libbey trading up from the 52-week low, and with predictions for positive earnings in the forecast, investors may want to give Libbey some attention.