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In this stock market environment, it is hard to find winners. Many sectors including energy, technology, and financials are struggling—but one area that remains strong is consumer products. Among consumer based companies, WD-40 Company (WDFC ) is a notable outperformer. The stock is up 28% just in the past one year, and it is up 6% year-to-date. It has handily outperformed the S&P 500 Index, which is down 9% in the past year.

Shares of WD-40 recently closed at all-time highs. In fact, the stock has posted positive returns for the trailing one-year, three-year, and five-year periods. The company is doing a good job of growing sales and earnings, but the bulk of the gains in stock price are due to multiple expansion. Investors appear to be extremely optimistic about the company’s growth prospects, but it is doubtful whether this level of optimism is warranted. Going forward, investors should expect continued growth in earnings per share and dividends. However, the current valuation does not offer investors a margin of safety. As a result, income and value investors should wait for a decline in the stock price in order to get a better buying opportunity.

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