Like its namesake, our latest recommendation is a thing of beauty—the stock is up 50% year-to-date with no sign of stopping—suggests Linda McDonough in Personal Finance.

Usually, we shy away from stocks selling at 52-week highs, but Helen of Troy (HELE) caught our attention. We wouldn’t have noticed the stock if not for the million-plus shares traded on October 9.

That volume, which is triple the stock’s 90-day average, accompanied a 7% gain in price. This trading pattern helps us identify stocks undergoing a fundamental change in their businesses.

Helen of Troy’s beauty division, representing 30% of sales, had been in decline for three and a half years.

Julien Mininberg, who became CEO in March 2014, hatched a plan to resuscitate beauty sales that paid off in the second quarter when they grew 10%, the first increase in seven quarters.

Helen of Troy’s beauty products are a mix of toiletries, styling tools, and hair accessories. The firm has always augmented its growth by buying new brands.

Helen of Troy’s biggest acquisitions were OXO housewares in 2004 and Kaz in 2010. In June 2014 Helen of Troy added an entirely new product line by buying Healthy Directions, a manufacturer and retailer of nutritional supplements and vitamins.

Helen of Troy funded most of these acquisitions with debt that is paid down slowly from the business’s cash flow. At the end of the second quarter, Helen of Troy had $479 million of debt, down from $605 million the previous year.

Cash flow has grown steadily, amounting to $200 million in the past 12 months. The business requires little investment in equipment, leaving most of that cash available for new acquisitions or stock repurchases.

Although earnings for the most recent quarter grew 13%, full-year earnings per share are expected to be $5.71, down from $5.85 last year. The decline is due to $0.44 of one-time gains that boosted last year’s number.

Adjusting for those gains shows a 6% increase. New products, continued growth in the vitamins business, and a company-wide cost-cutting effort should invigorate earnings next year.

In fact, earnings should grow 15% over the next five years. Helen of Troy trades with a price-to-earnings ratio of 18 based on 2017 earnings. The company’s strategy of driving new brands while improving upon its current portfolio shows the brains behind this beauty.

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