UniFirst Corporation (UNF) provides uniforms and protective clothing wear to workplace employees in the United States. It also provides renting and cleaning services as well. The company has a market cap of about $915 million.

Last week, the company said that fiscal third-quarter earnings rose 24%, mostly due to strong margins in its laundry business. Earnings per share came in at 87 cents, 11.5% ahead of expectations. This was the third quarter in a row that the company exceeded views by more than 10%. Revenues increased 11% to $254.6 million.

Its laundry business accounts for about 90% of the company’s total sales and it is doing wonderfully. Operating margins increased 180 basis points to 12.3% during the quarter versus last year, which means more every dollar is flowing to the bottom line. We are impressed that the company was able to increase operating margins at a time when the economy is poor and fuel costs are soaring.

The analyst community is quite bullish on the company as well. Over the past week, this year’s earnings estimates have increased 15 cents to $3.19 per share. Next year’s numbers got an 18-cent lift. The stock is attractively valued at 14x next year’s estimates, in-line with its long-term growth rate. We see this as a $55 stock in the next 6-to-12 months.

Suggested Stop: $43.68