La-Z-Boy is a residential furniture producer, marketing furniture for every room of the home, as well as for hospitality, healthcare and assisted-living industries. This stock has been taking it on the chin since April 2006. Last month it reported a loss due to reduced casegoods and retail sales. I think that fiscall year 2008 earnings estimates of 18 cents are way too high given the weakness in the economy and housing specifically. Institutional shareholders have been dumped the stock heavily at the end of the first quarter.
Don't make the mistake of looking at the P/S or P/B and thinking that this stock is cheap. The stock is broken, that's why both ratios are far under 1. Look at thee P/CF of 15, nearly twice the industry average and a third more than the S&P 500.
If you look at a summary of their income and balance sheets from the last 10 years , you see nothing approaching rhyme or reason to the profitability of this company. Even their tax rate has fluctuated wildly.
Cash Flow has been equally erratic for the last five years.
They make a great product, but this looks like a tough business, even when things are going well in the economy as a whole. I wouldn't risk a penny of my money on it in a recession.
$6.46 (07/08/08)
