7 Home Furnishings Plays That Could be Riding the Housing Market’s Recovery

Michael Teague |

On Tuesday, the Commerce Department released data indicating that for the month of February, homes were constructed at an adjusted annual rate of 917,000, up from 910,000 in January, the second fastest pace since mid-2008, while construction permit requests increased at their fastest pace in the same time-frame. Additionally, 946,000 building permits were granted, an increase of 4.6 percent, and also the largest since the recession began back in 2008.

These figures are being touted as further indicators of a housing market that is returning to a semblance of health, as they are expected to increase in the coming months. All these homes will require furnishings and fixtures once they begin being sold or rented out, and so it is not unreasonable to see a boost reflected in stock prices in that industry as well.

The following seven stocks from the home furnishings and fixtures industry were screened for positive year-to-date performance (over 20 percent) and an analyst recommendation of “buy or better”.

Also included in the screen is an average trading volume of over 50,000 shares, an indication that the stock has enough weight to merit attention.   A relative volume of less than 1.5 says that the stock’s performance is more likely to be the result of a consistent growth pattern, rather than a one-time event, such as the Dow (DJIA)’s record breaking streak that just ended last Friday.

American Woodmark Corp. (AMWD) – The Winchester, Virginia manufacturer and distributor of kitchen and bathroom cabinets for new and remodeled homes has a market cap of $506.42 million, and has gained 23.83 percent in 2013, with shares trading at $34.45 as of Tuesday’s close.  The average trading volume is 128.88 thousand shares a day, with a relative volume of 0.59.

Ethan Allen Interiors (ETH) – The Connecticut based furniture manufacturer has a market cap of $893.22 million, with shares currently trading at $30.95, up 20.38 percent this year.  Average trading volume is 365.30 thousand shares-per day, with a relative volume of 0.61.

Fortune Brands Home & Security Inc. (FBHS) – The Deerfield, Illinois company owns well-known brands such as Moen, Master Lock, Therma-Tru and Simonton.  With a market cap of $5.98 billion, shares are trading up 24.47 percent in 2013 at $36.37, at an average volume of 1.38 million per day.  Relative volume is 0.76.

Leggett & Platt Inc. (LEG) – The Carthage, Missouri company manufactures bedsprings, among a plethora of other non-home related products, and has a market cap of $4.64 billion, with shares trading at $32.51, a gain of 20.50 percent on the year.  The average trade volume is 1.26 million per day, while the relative volume is a solid 0.77.

La-Z Boy Inc. (LZB) – The well-known sofa and chair manufacturer has a market cap of $1 billion, with shares trading at $19.13, an increase of 35.48 percent for 2013.  LZB trades an average of 428.35 thousand shares per date, at a relative volume of 0.46.

Mattress Firm Holding Corp (MFRM) – The online mattress retailer has a market cap of $1 billion, with share price having increased 21.16 percent in 2013, where they are trading at $29.72.  MFRM trades on average 248.43 thousand shares a day, with a solid relative volume of 0.87.

Tempur Pedic International Inc. (TPX) – The Lexington, Kentucky specialty mattress manufacturer is practically ubiquitous in the U.S.  With a market cap of $2.75 billion, shares are trading at $46, an increase of 46.11 percent on the year.  The average volume of shares traded per day is 2.02 million, with a relative volume of 0.48.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
LEG Leggett & Platt Incorporated 48.45 0.41 0.86 10,185
ETH Ethan Allen Interiors Inc. 35.05 0.30 0.86 4,075
FBHS Fortune Brands Home & Security Inc. 54.88 1.08 2.01 96,488
ELF.PR.H:CA E-L Financial Corporation Limited First Preference 24.85 0.00 0.00 0
AMWD American Woodmark Corporation 75.00 0.60 0.81 6,203
TPX Tempur Sealy International Inc. 64.45 1.17 1.85 21,190
LZB La-Z-Boy Incorporated 29.90 0.10 0.34 18,245
MFRM Mattress Firm Holding Corp. n/a n/a n/a 0

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