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Opinions Gordon Reid
La-Z-Boy Inc.LZBTOP PICKAug 26, 2015
Gordon ReidStock price when the opinion was issued
As of Jun 17, 2026. Market Open.
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Lumpy during pandemic, supply chain now sorted out. Strong management. Earnings have grown average 15% over last 10 years. 13x earnings, still a good opportunity. Buying back franchises will enhance profitability.
Gordon ReidAverage US house price is down only 3% from highs. Homebuilders are getting through this downturn quite nicely, and the homebuilders index is hitting 52-week highs. LZB will benefit. Less than 10x earnings, solid dividend, revenue will do well coming off supply chain issues. Yield is 2.56%.
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Don LatoChart shows this is trying to get through its high of December. It has a great little trend underneath that. Has been pretty volatile. Indicators are sort of turning up. This could possibly come back to $28 still, which is where the long-term trend is, but he doesn’t expect that to happen. There is a good level at around $30 you could look at, or you could wait for the breakout above $33. Take a half position, because a lot of times breakouts have to come back to get retested.
He likes it from a macro point of view. From a company specific point of view they are doing good things. They want to grow their business by 400 stores in 5 years. Their margins are improving from 2.5% to 5% and he thinks they are on the way to 7%.
Gordon Reid(A Top Pick Aug 26/15. Up 10.69%.) This is really a story about the housing market. There needs to be a lot more household formations to satisfy the population growth. 5 years ago, net margins were about 2%, last year they were 5%, and by the end of the decade he thinks they will be over 7%.
Gordon ReidThis is a play on the housing recovery, which is very, very nascent. Household formations are still well below historic levels. This company is going to be a beneficiary of that. Very, very well-managed. You are going to see a higher beta on a stock like this, and he would suggest that you stay with this over the long-term, and not be too sensitive to the ups and downs. Thinks it will pay you over time.
Gordon Reid
A derivative play on the housing recovery. This company does well when the housing market does well. They are managing their business very well. Not only growing revenue, but are expanding margin. He is expecting about a 250 basis point expansion and margin over the next few years, which will go straight to profits, because it is operating leverage. Dividend yield of 1.17%.