Tandy Leather Factory (TLF) is a do-it-yourself (DIY) leather craft retailer and wholesaler, the strongest brand in the leather crafting hobby for generations, and is uniquely positioned to benefit from any expansion of popular interest in do-it-yourself wallets, handbags and other accessories. With a market cap of just $86 million and daily volume of just over 7,000 shares, the stock is a hidden beauty, but one that can shine in January.
TLF has been growing sales at a rate in the high single digits, yet sells for less than 11X 2014 expected earnings of $0.80 per share. It also has tremendous international opportunity. Tandy currently has three foreign stores open (one each in the UK, Spain and Australia), and all have been performing very well.
During a time in which many retail related companies have struggled, TLF has drifted higher and I see that momentum continuing into the new year. I see it as both a good short and long-term play. Traders only looking to hold the stock for a short period of time can sell TLF at $9.25, but investors can also keep TLF for the long term and still be rewarded.