Mohawk Industries, Inc. (NYSE:MHK)

CAPS Rating: 1 out of 5

The Company is a carpet and rug manufacturer and is also a manufacturer, marketer and distributor of ceramic tile and natural stone in the United States as well as a producer of laminate flooring in the United States and Europe.


Player Avatar DemonDoug (32.36) Submitted: 4/24/2009 9:12:32 PM : Underperform Start Price: $49.64 MHK Score: -70.77

With the absolutely insane rally in things related to housing over the past few days, I wanted to find the one stock that has gone up way, way too fast. MHK fits that bill, it is WAY overbought, it's fundamentals are terrible, and while it is a good company within it's industry, it's main customers (homebuilder companies) are buying less and less of it's products. They offered guidance that is way out of line with reality, they lost money last quarter, and even if they reduce their expenses, will it be fast enough to turn a profit over the next 2 quarters? Questionable. And with a 200:1 debt:cash ratio, that isn't looking good either. Granted, they do have generally high revenues, so the potential for profitability is there, but clearly the stock is well overvalued and has run up too far, too fast.

One final piece of data for you to ponder:
EPS (ttm):   -21.32

Does that look like a company you want to own?

Member Avatar ValueMrk (99.62) Submitted: 5/26/2009 11:32:58 AM
Recs: 0

Simply stated - yes it is a company I would want to own. Despite the huge run up. When housing market stabalizes they will generate free-cash quite quickly. This is a long-term investment.

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