Is There Value In Stanley Black & Decker? (SWK)

A name that's recently popped up to me is Stanley Black & Decker SWK. It's not a sexy stock, it doesn't sell iPads, or trade oil, but it does do provide tools that people need in their everyday lives to get by. Whether it's fixing your house with a drill, or toasting bread with a toaster, or using a nail gun, SWK has all the products you need and more. It also recently announced the iShredder at the Consumer Electronics Show, which is a cool shredder used to shred your documents. It's not going to be a game changer, but it is nice to see the company using the "i" moniker that Apple AAPL has made so hip. Stanley bought Black & Decker last year, and is currently in the process of working out the synergies between the two companies. Management said that it could see $350 million in synergies between the two companies, but I suspect it could be even more. One thing to be afraid of is the rising input costs, but that's with all companies. If the company can pass off some of these inflationary concerns, then it should do just fine. The company generates strong free cash flow, and as the brands continue to integrate, free cash flow should continue to increase. This means larger buybacks, dividend increases and acquisitions to strengthen the brand. Brian Sozzi of Wall Street Strategies rates the company a Buy with a $77 price target. He says, "Though we reduced our 4Q10 EPS estimate to $0.76 from $0.94, accounting for a FY10 revised outlook from SWK that embeds valid concerns on inventory de-stocking at h me centers and more moderate growth at Industrial relative to 3Q10, among other factors, FY11 looks to be shaping up quite well. Underpinning our assumption for 33% y/y EPS growth in FY11 includes (1) share gains from the execution on new product introductions, specifically from legacy Black & Decker; (2) weak dollar favorability to net sales; (3) realization of cost synergies from Black & Decker integration ahead of our prior modeling; and (4) growing penetration of the combined franchise in emerging markets." Shares look a little pricey here, I would wait around $62 to start initiating a position, but wouldn't go much lowwer than that. Disclosure: no position in SWK