Buy - Price $15.42 on Dec. 9
by Hilliard Lyons

As the leading domestic casket maker, with a well-known name and established distribution, we find HI's market position attractive [and like its] recession-resistant business and sizeable excess-cash generation. Revenue guidance was ahead of our estimate, while EPS (excluding legal spending) was in line with our figures. Revenue for the fiscal year could be up 3% to 5%. Sales for fiscal 2009 could be in a range of $695 million to $710 million...due [mainly] to price increases, partially offset by lower volume and negative mix effects...[which] reflect more private-label business and growth in cremation. We have raised our revenue forecast by $10 million, to $700 million, to reflect the higher prices. HI management guided to an EPS range of $1.73 to $1.85, excluding $18.5 million (related to antitrust litigation)....Our fiscal 2009 EPS estimate is $1.80, up 5% from $1.71 in fiscal 2008, excluding nonrecurring items. Management's goal is to boost this to 5% to 8% with acquisitions. Target: 26. Market cap: $963 million.

51,000 825

Breeden Capital Management, the hedge fund run by Richard Breeden, a former chairman of the Securities and Exchange Commission, reported ownership of 3,994,162 shares (6.4%) of Hillenbrand after buying 1,053,467 from Aug. 22 to Sept. 18, at prices of $22.01 to $22.99 each.

first dividend as a publicly traded company

Funeral services products provider Hillenbrand Inc. said Thursday its board authorized the repurchase of up to $100 million of the company's outstanding common shares.

Purchases will be made from time to time in the open market or in private transactions, and will be funded from the company's available cash and cash flow.

Hillenbrand is the holding company for Batesville Casket Co. The company currently has about 62.4 million shares outstanding.

The stock trades for 7.5x cash flow.

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Two directors of Hillenbrand Inc., the holding company for Batesville Casket Co., which provides caskets and funeral products, recently bought 87,400 shares or $1,742,936 worth of stock.

The stock has a PE of 12.