Shamir Optical: Beginning to see the light

Shares of Shamir Optical Industry (Nasdaq:SHMR) have literally seen better days. But Shamir is now starting to flex its optic muscles, turning in first-half 2008 results that suggest an end to the string of lows scratched out this year.

To paraphrase outlaw Butch Cassidy, Shamir's got vision while the rest of the world's wearing bifocals. Shamir makes and designs progressive eyeglass lenses, which combine several strengths in a single lens for a gradual transition from near to intermediate to distant vision.

Progressive lenses are relatively expensive and are not covered by insurance as readily as single vision or bifocals, making them a discretionary purchase. And so Shamir's stock price has struggled because of economic worries, particularly in the United States.

Still, Shamir last month confirmed its outlook for revenue growth of 10% to 16% in 2008, based on exchange rates as of December and excluding results of its Mexican operation. In the second quarter through June, Shamir earned $0.16 per share, up 30% from the year-ago period. Revenues rose 25% to $37 million.

Sales were strong everywhere: in Europe, up 16% over year-ago to $20 million; in United States up 20% to $7 million and the rest of the world up 71% to $9 million. Shamir's strategy to drive growth organically and with acquisitions will prove beneficial in the long run, wrote analyst Keay Nakae at Collins Stewart. Nakae has a target of $10.

The second-quarter results helped boost shares to Tuesday's close at $6.80, up from the all-time low on July 14 at $5.83. Shamir, of Kibbutz Shamir, Upper Galilee, Israel, went public on Nasdaq in March 2005 and on the Tel Aviv Stock Exchange . . .

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