For Sherwin-Williams, it's a world filled with sprucing-up

SHW's new store openings are expected to total 20 in F2009 -- again, not bad -- but traffic concerns prevent that metric from receiving any enthusiasm from institutional investors, and the stock has demonstrated this: meandering in the $55-range for about a year. The First Call FY2009/FY2010 EPS estimates for SHW are $3.63 and $4.14.

Still, even without a near-term catalyst, the view from here argues that a current P/E of 15 is reasonable. Further, any upside surprises regarding the housing sector will spark renewed institutional investor interest, so SHW is a modest get-ahead-of-the-pack play. Modest because a tight Sell/Stop Loss has been set, in the event the much-anticipated U.S. recovery does not appear by Q3/Q4.

Stock Analysis: Sherwin-William is a moderate-risk stock. Consider buying a 25% position in SHW now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your SHW position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $37.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.