Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: MarkMichaelT Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 136  
Subject: Re: Intrinsic value Date: 8/27/2002 12:46 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
"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.





Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Saul's Investing Discussions

Why Did I Buy a Bunch of PFIE Today?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement