Indigo Books & Music Inc.’s (TSX:IDG) stock has declined more than 12% in the last six months. This is not an overly dramatic fall, yet it’s surprising when we look at the traction that the company has made this year. As CEO Heather Reisman puts it, the company “is moving out of its transformation stage and into growth mode.”

Here are five things to like about the company:

Strong sales growth

Same-store-sales growth in the fiscal year ended March 28, 2015 was +6.8% in the superstores, flat in the small format stores, and up 11.8% in the online segment. Despite closing eight stores, revenue increased 1%.

In its latest quarter, Inc. saw a 15% increase in net sales compared with the first quarter of 2014. Indigo’s 12% increase in online sales compares favourably.

The core book business grew for the first time since the advent of e-reading.

Customers are embracing the company’s move into home décor and gifts. General merchandise accounted for 30.2% of total revenue in fiscal 2015 versus 26.5% of revenue in fiscal 2014. Lifestyle, paper, and toys saw double-digit growth and American Girl continues to greatly surpass expectations,

Big improvement in EPS

Fiscal 2015 EPS was a loss of -$0.14 compared with a loss of -$1.21 in fiscal 2014. This was due to a 1.7% increase in gross margin, to 43.8%, a reduction in operating, selling, and administrative expenses (44.4% of revenue versus 46.5% of revenue in fiscal 2014), and a reduction in income tax expenses.

Strong balance sheet

The company has no debt on the balance sheet, and a cash balance of $203 million.

Stock still trading below book value

As of yesterday’s close, the stock was trading at $10.50, 12.5% below its book value of $12.00.

More American Girl stores

This year, the company plans to open three more of the highly successful American Girl stores.

Transformation complete

Back in November 2013 the company was in dire straits. Losses were mounting and costs were rising amid declining book sales and increasing competition from discount U.S. retailers. This precipitated the decision to refocus, revamp stores, and shift the strategy to turn the retailer into a “lifestyle company,” with less focus on books and more focus on gifts and toys, or general merchandise.

In order to fund the increased capital expenditure that goes along with this big effort, Indigo’s dividend was cancelled. This sent the shares tumbling to a low of $7.43 on November 18, 2003. Today the company is in a good position to continue on the growth trajectory that it has shown this year. And with results like we are seeing out of Indigo recently, it seems to be only a matter of time before investors take notice, more analysts start covering the name, liquidity rises, and demand for the shares rises.

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Fool contributor Karen Thomas owns shares of Indigo Books & Music Inc.