Alright I have an idea... Combining Van's theory of housing and his mention of wood futures I immediately thought at ghe time of fake wood for decks and then i remembered that stock that had the Chinese fake wood that had poison in it (big surprise) but I have a weird theory of investing- when I'm thinking of of something and then I suddenly here a commercial ... I see it as a sign! in this case Floor & Decor... I just heard an adon the radio for Floor & Decor-- they are opening up...
This national flooring company got its start just 20 years ago, yet is now sporting a market cap of nearly $6 billion and doing nearly $2 billion in sales a year.
That’s quite a growth story compared to other housing stocks.
Some of that has been its ability to move into areas where the competition was hurt during the 2008 financial crisis and take advantage of the low interest rates to grow its business.
Since that era of low rates has only improved now, and there are millions of people sitting around staring out their flooring, business is booming once again. Plus, all the new construction means its commercial lines are also growing.
FND stock is up 103% in the past
three months, <--Oh Lawd.....but the stock is getting a bit expensive. Do ya think! However, i
f the recovery in the U.S. stays strong, its premium will be worth it in the long run. Stays strong it's weak as heck.....
Floor & Decor's stock could have gained even more, but shares gave a little back after the company announced a secondary stock offering of 5 million shares on May 20. As it now stands, the stock price has recovered to around the point where it started in 2020.
In this case, Floor & Decor's secondary offering allows a couple of funds to unload their stake in the company. Floor & Decor won't get any of the proceeds. This kind of selling is typical with newly public companies. Even though the company went public three years ago, this news shouldn't be viewed as anything out of the ordinary.
Now what
Floor & Decor's Q1 was good, but the upcoming second quarter will be a different story. In the last six days of March, comparable sales plummeted 46% from the same period in 2019, and sales remain sharply down. Other home-improvement retailers aren't seeing that kind of drop in sales, but then again they offer more general
consumer-discretionary products. When the economy is struggling, flooring projects may not be high on homeowners' list of priorities.
That said, management is hopeful purchases will quickly rebound in the coming months. In its recent conference call, it noted that sales of flooring samples have increased, suggesting flooring projects are on the horizon and Floor & Decor is still top-of-mind for consumers.
Berenberg starts 'low-cost leader' Floor & Decor at Buy 06:46 FND As previously reported yesterday, Berenberg analyst Alex Maroccia initiated coverage of Floor & Decor with a Buy rating and
$74 price target. The company has set itself apart with its low-cost leadership and focus on professional customers, giving it an opportunity to more than triple its store footprint in upcoming years, Maroccia argued. Given its "substantial" U.S. growth potential and "margin-friendly" distribution center layout, he sees Floor and Decor as a more compelling investment than its peers, the analyst added.
Floor & Decor price target raised to $65 from $60 at Wedbush 08:18
FND
Wedbush analyst Seth Basham raised the firm's price target on Floor & Decor to $65 from $60 and keeps an Outperform rating on the shares. The analyst says that a new round of checks with independent flooring retailers indicates that sales momentum has persisted into June, with most retailers reporting flat-to-positive year-over-year growth in recent weeks. Importantly, in the Southeast region that "reopened" first, checks indicate that initial sales strength from pent-up demand as stores reopened has given way to building new flooring project pipelines as
homeowners shift spending to the place they are spending more time, he adds. Basham sees this region as an important leading indicator for other regions.
While concerns remain around fading stimulus check benefits, elevated unemployment and rising coronavirus cases, the analyst turns more sanguine on the the second half of 2020 outlook due to spending shift and housing strength that could persist with housing affordability support from low mortgage rates and the extended qualified mortgage patch.
