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Welcome to Profit Confidential • Wednesday, May 23, 2012

Eye Care Industry Still Looking Good

Monday, November 27th, 2006
By Mitchell Clark, B.Comm. for Profit Confidential

One of my favorite large-cap ideas is Luxottica Group (NYSE/LUX). This Italian manufacturer of eye glasses is a proven wealth-creator on the New York Stock Exchange.

For a large-cap company, Luxottica is generating some impressive growth. Recently, the company announced its financial results for the three and nine months ended September 30, 2006.

According to the company, its revenues for the third quarter grew 9.8% to euro 1.12 billion. Net income for the period grew 16.6% to euro 104.13 million.

The company cited that the third quarter was a record for its wholesale operations and its Sunglass Hut retail division experienced a 6% increase in same-store sales.

When I first started writing about this company in February, the stock was trading around $25 per share. It quickly appreciated to $30 per share and then pulled back. Now, its trading around its 52- week high of over $31 per share and is looking good for the future.

I don’t often focus on large-cap investment opportunities, but occasionally the fundamentals and individual investment make sense. In this particular case, Luxottica is part of my longstanding eye care investment theme, which I continue to believe makes for an attractive industry group in which to invest.

In 1992, Luxottica split its stock two-for-one. Then in 1998, the company split its stock a whopping five-for-one. More recently, the company split its stock another two-for-one in 2000, and I think it we could see another stock split in the near-future.

If you pull up a ten-year chart on Luxottica, you will see that on a split-adjusted basis, the stock has appreciated from approximately $5 per share in late 1996, to its current level of over $30 per share. This represents an impressive capital gain of some 500% over a ten year period. All this from a well established, mature, large-cap company.

I think this is very impressive. Baring any major shock to the system, the good news is that Luxottica should continue to be a solid wealth creator for many years to come.

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Profit Confidential AuthorMitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.

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