Stocks & Investing
Stocks and Investing
Stocks and Investing 
Wed, October 12, 2011
LEG, FBN, HOFT, ZZ, VIRC, DIIBF, Furniture Stocks Undervalued
October 12, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Furniture sector and these stocks are the most undervalued as of today. LEGGETT & PLATT, INCORPORATED (NYSE:LEG), FURNITURE BRANDS INTL INC (NYSE:FBN), HOOKER FURNITURE CORP (NASDAQ:HOFT), SEALY CORP (NYSE:ZZ), VIRCO MFG CORPORATION (NASDAQ:VIRC), DOREL INDUSTRIES-CL B (OTC:DIIBF) are all expected to go Up as they are Undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.
The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:
Symbol Company Name Last Close Fair Value Valuation Industry
LEG LEGGETT & PLATT, INCORPORATED $21.88 $25.96 15.70% Undervalued Furniture
FBN FURNITURE BRANDS INTL INC $2.00 $5.16 61.20% Undervalued Furniture
HOFT HOOKER FURNITURE CORP $10.22 $14.79 30.90% Undervalued Furniture
ZZ SEALY CORP $1.49 $2.33 36.10% Undervalued Furniture
VIRC VIRCO MFG CORPORATION $1.83 $3.21 43.00% Undervalued Furniture
DIIBF DOREL INDUSTRIES-CL B $22.42 $34.13 34.30% Undervalued Furniture
Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.
Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.
LEGGETT & PLATT, INCORPORATED (NYSE:LEG) - Leggett & Platt, Incorporated designs and produces a range of engineered components and products worldwide. It operates in four segments: Residential Furnishings, Commercial Fixturing & Components, Industrial Materials, and Specialized Products. The Residential Furnishings segment manufactures or distributes bedding, furniture, consumer, fabric, and carpet underlay products to manufacturers of finished bedding products or upholstered furniture for residential use. The Commercial Fixturing & Components segment offers fixture and display, and office furniture components to retail chains and specialty shops; brand name marketers and distributors of consumer products; and office, institutional, and commercial furniture manufacturers. The Industrial Materials segment provides steel rods; drawn wire; steel billets; fabricated wire products, such as shaped wire for automotive and medical supply applications; tying heads, boxed wire, and parts for automatic baling equipment; coated wire products, including dishwasher racks; and wire retail fixtures and point-of-purchase displays. This segment also offers welded steel tubing and fabricated tube components. The Specialized Products segment provides manual and power lumbar support and massage systems for automotive seating; seat suspension systems; automotive control cables, such as shift cables, cruise-control cables, seat belt cables, accelerator cables, seat control cables, and latch release cables; low voltage motors and actuation assemblies; and formed metal and wire components for seat frames, as well as quilting machines for mattress covers, machines used to shape wire into springs, and industrial sewing/finishing machines. It also offers commercial vehicle products, such as van interiors; docking stations that mount computers and other electronic equipment inside vehicles; and specialty trailers used by telephone, cable, and utility companies. The company was founded in 1883 and is headquartered in Carthage, Missouri.
FURNITURE BRANDS INTL INC (NYSE:FBN) - Furniture Brands International, Inc. designs, manufactures, sources, and retails home furnishings. It offers case goods, including bedroom, dining room, and living room furniture products; stationary upholstery products comprising sofas, loveseats, sectionals, and chairs; motion upholstered furniture products consisting of recliners and sleep sofas; occasional furniture products, such as accent pieces, home entertainment centers, and home office furniture products, as well as wood, metal, and glass tables; and decorative accessories. The company markets its products under the Broyhill, Lane, Thomasville, Drexel Heritage, Henredon, Hickory Chair, Pearson, Laneventure, and Maitland-Smith brand names. Furniture Brands International sells its products through a network of independently owned furniture retailers, national and regional department stores and chains, and trade showrooms, as well as through various retail channels, including mass merchant stores, single-branded stores, independent dealers, and specialized interior designers. As of December 31, 2009, it operated 37 stores. The company was founded in 1836 and is headquartered in St. Louis, Missouri.
HOOKER FURNITURE CORP (NASDAQ:HOFT) - Hooker Furniture Corporation, together with its subsidiaries, designs, imports, develops, and markets residential wood, metal, and upholstered furniture products in North America. The company offers wood furniture products, including home entertainment, home office, accent, dining, bedroom, and bath furniture under the Hooker Furniture brand; and youth furniture under the Opus Designs by Hooker brand. It also offers motion and stationary leather furniture, and occasional chairs. The company also offers various residential leather and fabric upholstered furniture under the Bradington-Young upholstery brand; specializes in leather reclining and motion chairs, sofas, club chairs, and executive desk chairs; and offers upscale occasional chairs under the Sam Moore upholstery brand. It serves retailers of residential home furnishings, including independent furniture stores, specialty retailers, department stores, catalog merchants, interior designers, and national and regional retail chains. The company was founded in 1924 and is headquartered in Martinsville, Virginia.
SEALY CORP (NYSE:ZZ) - Sealy Corporation engages in the manufacture and marketing of various bedding products. Its products include mattresses and mattress foundations. The company offers its products under the Sealy, Sealy Posturepedic, Stearns & Foster, and Bassett brand names. It also manufactures and markets latex and visco-elastic bedding products under the Embody, PurEmbrace, TrueForm, SpringFree, Stearns & Foster, Reflexions, Carrington Chase, and MirrorForm brand names. In addition, the company licenses its brands, technology, and trademarks to other manufacturers, including international independent licensees. Sealy Corporation offers its products to furniture stores, specialty bedding stores, department stores, warehouse club stores, and hospitality customers. It operates in the United States, Canada, Mexico, Argentina, Uruguay, Brazil, and Puerto Rico, as well as in western Europe. The company was founded in 1881 and is based in Trinity, North Carolina.
VIRCO MFG CORPORATION (NASDAQ:VIRC) - Virco Mfg. Corporation engages in the design, production, and distribution of furniture for the commercial and education markets in the United States. The company offers mobile tables, mobile storage equipment, desks, computer furniture, chairs, activity tables, folding chairs, and folding tables. It also offers seating products under various barand names, including ZUMA; ZUMAfrd that features Fortified Recycled Wood plastic seats, backrests, and work surfaces; The Sage, which serves students in college, university, and other adult education settings, as well as high school campuses; Sage tablet arm model for high school and adult learning venues; Ph.D.task chairs; I.Q. Series classroom chairs; and Virtuoso chairs. Its table products include TEXT table collections for learning environments; Lunada tables for seminar, conference, and related settings; Plateau tables; traditional folding and banquet tables, activity tables and office tables; and the computer tables and mobile tables. Virco also offers computer furniture, such as keyboard mouse trays, CPU holders, and support columns; desks and workstations; and specialty tables and other products for computing applications. In addition, the company offers desks/chair desks related products, including teacher desks and tablet arm units; and Parameter collection of desks, returns, and credenzas for teachers, principals, and district administrators, as well as business environments. Further, it offers administrative office furniture, such as desks, returns, bookcases, and other items; laboratory furniture for biology and chemistry classes, and other school and college based lab settings; mobile furniture that includes mobile chairs for school settings and offices; storage equipment comprising stackable storage trucks; and chairs and folding tables for convention center, arena, and auditorium customers. Virco Mfg. Corporation founded in 1950 and is based in Torrance, California.
DOREL INDUSTRIES-CL B (OTC:DIIBF) - Dorel Industries Inc. engages in the design, manufacture or sourcing, marketing, and distribution of various consumer products primarily in the United States, Canada, and Europe. It operates in three segments: Juvenile Products, Recreational/Leisure, and Home Furnishings. The Juvenile Products segment offers infant car seats, strollers, high chairs, toddler beds, playpens, swings, and infant health and safety aids. It markets products under the Cosco Juvenile, Safety 1st, Maxi-Cosi, and Quinny brands, as well as Babideal, Bebe Confort, Baby Relax, and MonBebe. The Recreational/Leisure segment engages in the design, marketing, and distribution of recreational and leisure products and accessories, including bicycles, jogging strollers, and other recreational products. This segment also provides custom apparel, including cycling and running gear for teams and clubs. It markets recreational/leisure products under the Cannondale, Schwinn, GT, Mongoose, IronHorse, SUGOI, Pacific, Dyno, RoadMaster, PowerLite, and InSTEP brand names. The Home Furnishings segment manufactures and distributes ready-to-assemble (RTA) furniture for home and office use, as well as metal folding furniture, futons, step stools, ladders, and various imported furniture items, as well as computer tables, microwave stands, and entertainment and home theater units. This segment offers RTA furniture to mass merchants, office superstores, and hardware/home centers. It markets home furnishings products under the Cosco Home and Office, Ameriwood, Dorel Home Products, Altra Furniture, and Dorel Asia brand names. Dorel Industries sells its products primarily to retail chains comprising mass merchant discount chains, specialty stores, department stores, hardware/home centers, independent stores, and sporting good stores. The company was formerly known as Dorel Co. Ltd. and changed its name to Dorel Industries Inc. in May 1987. The company was founded in 1962 and is headquartered in Montreal, Canada.
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