Equity markets have rallied of lows and have gotten pretty quiet of late. So quiet that I kind of want to kick back and relax in a nice sofa until the market wakes up. Tuesday the volume was so bad it was on par with those of half-day holidays. Not surprisingly, this has me considering who might benefit if we were to go out and buy a new recliner.
Below I take a look at four top ranked stocks that have potential to benefit from current market conditions. Even if risks from earlier in the year creep back into the markets, low interest rates and cheap gas prices will allow the American consumer to support the top lines of these companies.
Stanley Furniture (STLY) is a designer and manufacturer of residential wood furniture exclusively targeted at the upper-medium price range and a Zacks Rank #2 (Buy). It offers upscale wood residential home furnishings, including dining, bedroom, living room, home office, home entertainment, and accent items, as well as nursery and youth furniture. The company sells its furniture under the Stanley Furniture, Coastal Living, and Stone & Leigh brand names.
The High Point, North Carolina based company is valued at $40 million with a forward P/E of 34. The stock sports Zacks Style Scores of “A” in growth and “B” in Value and Momentum. The company also gets a VGM score of “A”.
There have been some private equity stakes taken in the stock recently, with Hale partnership showing a 14.9% stake and Solas Capital Management with a 16.4% holding. This shows confidence and a potential for the company to be taken private.
Stanley has earnings May 2 where the company will go for its third straight EPS surprise to the upside. After a long stretch of misses, it seems to have turned the corner, beating five out of the last six quarters.
La-Z-Boy (LZB) is a Zacks Rank #2 (Buy) that is the third largest furniture maker in the U.S., the largest reclining-chair manufacturer in the world and America’s largest manufacturer of upholstered furniture. La-Z-Boy was founded in 1927 and is based in Monroe, Michigan.
The company has a $1.3 billion market cap with a forward P/E of 17. It sports a Zacks Style Score of “A” in Growth and “B” in value and has a VGM score of “A”. La-Z-Boy pays a dividend of 1.53% and expected EPS growth of 17.5%.
Over the last 60 days, analysts have revised current fiscal year estimates 2.5% higher, from $1.55 to $1.59. If the company can beat again it should break out of this recent range it has been stuck in over the last year. La-Z-Boy will go for its fifth straight positive EPS surprise next quarter on June 21st.
Legget & Platt, Inc. (LEG) is a Zacks Rank #2 (Buy) that designs and produces various engineered components and products worldwide. The company operates through four segments: Residential Furnishings, Commercial Products, Industrial Materials, and Specialized Products. The company is headquartered in Carthage, MO and has facilities throughout North America and in numerous international locations.
Legget & Platt has a $6.5 billion market cap with a forward P/E of 20. It sports a Zacks Style Score of “B” in Growth and has a VGM score of “C”. The company pays a dividend of 2.69%.
Over the last 60 days analysts have revised current fiscal year estimates 2.8% higher from $2.35 to $2.43. For fiscal year 2017, estimates have been revised 4.2% higher from $2.60 to $2.71. Earnings are on May 5th, where the company will go for its third straight beat on EPS.
American Woodmark Corporation (AMWD) isn’t a place to get a recliner, but it while you’re relaxing in your La-Z-boy you’ll want to admire the kitchen cabinets supplied by this company. It is a Zacks Rank #1(Strong Buy) that manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets. The Virginia based company sells its products under the American Woodmark, Timberlake, Shenandoah Cabinetry, Shenandoah Value Series, and Waypoint Living Spaces brand names.
American Woodmark has a $1.1 billion market cap with a forward P/E of 20. It sports a Zacks Style Score of “B” in momentum and has a VGM score of “C”. The company pays no dividend.
Over the last 60 days analysts have revised current fiscal year estimates 6.5% higher from $3.36 to $3.558. For fiscal year 2017, estimates have been revised 4.6% higher from $3.90 to $4.09. Earnings are on May 5th, where the company will go for its third straight beat on EPS.
Furniture Stock to Buy In Summary
Furniture stocks can be a boring group, but these four companies are performing well with the American consumer so strong. As long as the market continues to avoid the volatility of early 2016, expect these stocks to head higher.
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