Stanley Furniture Co. (NASDAQ:STLY)
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Designer and manufacturer of residential wood furniture exclusively targeted at the upper-medium price range. The Company offers diversified product lines across all major style and product categories within this price range.
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Revenue and net income rising steadily at about 10% annually for last decade, except for '00-'01 downturn and 2Q of '06 when all home furnishings businesses suffered a downturn related to slowdown in housing market. But even if you don't buy a new house, your furniture still wears out! Stock price beaten down to early '04 level even though earnings and cash flow are 50% higher and debt has been almost halved since then. Debt now basically equals cash on hand. Great long-tenured management group. Selling at about 11 times cash flow. And pays 1% dividend.
Have to love a business that owners cant afford to let fail. Well run family business.
Me again. STLY took a hit today (10/17) due to lower than expected revenue and earnings. But cash flow grew slightly, so it is now priced at about 8 times cash flow - a bargain number. So, one of two things (or a combination) will happen: 1) Cash flow will decrease substantially to reflect price, or 2) price will increase to reflect future value of current and future cash flows. With STLY's careful management of costs, I don't think 1) will happen. That leaves mostly 2). I will hang on. - bkwfool
Only one thing wrong...American furniture makers cannot compete with Chinese pricing. Shrinking market share will hammer the price. I shorted Stanley in July and see a future of red ink.