"Here's the tough part an why I'm looking for help. In order for these progections to be true, the management must be dependable, the business climate for their industry must be lukewarm to good, and their brand must have value."My quick thoughts on Ethan Allen:1. Their revenues were relatively flat for about 2 years, but have resumed growing this year. (Profit growth with flat revenues means reduced costs somewhere -- some kind of streamlining. If revenues start growing again, then profits can come from larger revenues.)2. Furniture companies get more business when the housing market grows. With the historically-low interest rates, home mortgages are also unusually low -- keeping home sales high. As long as this keeps up, ETH should benefit. Interest rates can't stay this low for much longer -- maybe another 9 months -- or we'll get serious inflation. When will the Fed raise rates? My guess is March 2003. At that point, the housing market (and furniture market) will probably drop.3. I think ETH's management has proven itself to be top-flight. It's been in place for a long time. 4. The furniture industry remains highly fragmented, so there's opportunity for a company to take market share.5. ETH is indeed undervalued compared with the market, so hanging in with ETH seems the right thing to do.
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