Small-Cap Stocks to Buy: Hooker Furniture (HOFT)
Hooker Furniture Corporation (NASDAQ:HOFT) is one of the nation’s largest furniture makers and sells it products under the Hooker, Bradington-Young, Sam Moore and Homeware brands.
This sector has seen its up and down in recent years, given the slow economy, sluggish home sales and tight credit. And considering the fact that furniture is one of the most durable goods in your home, if styles change and you haven’t kept up as a brand, it becomes a very costly mistake.
And this entire sector is driven by the U.S. consumer. If the consumer is spending, then times are good. When spending dries up, so do sales.
HOFT seems to be on a hot streak now. After three quarters of negative revenue growth, its FYQ4 numbers were very encouraging — up 14%. And earnings per share were up 28% year-over-year. Gross margins were up as well.
Part of the boost came from a new line HOFT launched in Q4. If it’s as big a hit as it was in the last quarter, the new quarters should show similar improvement. Another encouraging sign is that ocean shipping rates are at historic lows, which means it’s cheaper to get raw wood to the factories and that means better margins.