Timber! 60 Minutes Skewers Lumber Liquidators

Steve Kanaval |

Tree_Fall.jpgI'm not sure who I would rather have mad at me, 60 Minutes or ISIS based on the price action I would rather have ISIS mad at me as Twitter Inc. (TWTR) shares are unchanged after the terrorist group threatened to kill the CEO and employees.
If you were Lumber Liquidators the team at 60 Minutes did much more damage with its shares down 20%.

In November 2013, Lumber Liquidators (LL) hit a high of $120 per share and life was good! But flash forward to Fourth of July 2014, and a crack in the bell appeared followed by today’s action trading shares at $40. With two thirds of its value gone it took a hit from a 60 Minutes segment highlighting questionable activity in its flooring and where they bought it. 

Long on Lumber?

Many hedge funds had shares in this, and word on the street was that the segment was not going to be that bad but careening through support levels and closing under $50 again will test anyone long this stock. I did see some shorts cover today near the bell, but this acceleration move to the downside started a year ago at $105 and never seems to get its head above water- curious to see who steps up now to add to the long side. I think this is a core short against long some of the builders, and I think many managers have had that trade on for awhile now and got paid again today post Anderson Cooper bringing out the big lumber.

Watch for Long Ryland (RYL) , KB Homes (KBH) , Pulte Homes ($PHM) and short Lumber Liquidators trade to stay on for many and expect some new players, there seems blood in the water there.

 

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
KBH KB Home 17.21 -0.05 -0.29 3,806,003
PHM PulteGroup Inc. 19.60 -0.25 -1.26 5,453,225
LL Lumber Liquidators Holdings Inc 18.00 -0.20 -1.10 809,289

Comments

Emerging Growth

Immunovaccine Inc.

Immunovaccine Inc is clinical stage biopharmaceutical company. The Company develops products based on its proprietary vaccine enhancement platform in T cell activating therapies for cancer.

Private Markets

Lyft

Lyft matches drivers using their own personal vehicles with passengers who request rides through the smartphone app, and the passengers pay automatically through the app. When using Lyft, passengers have…

WayBetter

The spark hit Jamie when he saw co-workers competing to lose weight. Instead of pizzas and subs, they were eating salads and jogging along the river. Some were sneakily leaving…