Opinions
The Panic-Proof Portfolio (Stockchase Research)
Virco Manufacturing Corp.
VIRC-Q
PAST TOP PICK
Dec 12, 2024
Stock price when the opinion was issued
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We select this manufacturer of furniture in Canada and the US as a TOP PICK. Recently reported earnings grew by 32% as margins expanded. The company faces a record order backlog and has aggressively worked to be almost debt free. It trades at 9x earnings, 2.2x book and supports a 27% ROE. We recommend setting a stop-loss at $9.50, looking to achieve $16.00 -- upside potential of 33%. Yield 0.3%
(Analysts’ price target is $16.00)We reiterate this manufacturer of movable furniture for educational settings as a TOP PICK. Recently reported earnings showed a 33% increase in quarterly shipments and a widening gross margin. It trades at 10x earnings and supports a 27% ROE. Cash reserves are growing, while debt is retired. We recommend trailing up the stop (from $9.50) to $12.00, looking to achieve $19.00 -- upside potential of 16%. Yield 0.3%
(Analysts’ price target is $19.00)We reiterate VIRC as a TOP PICK. The developer of educational modular furniture continues to retire debt, while keeping cash reserves steady and supporting a 32% ROE. Most recently reported quarterly sales were up 34% with expanding margins. We continue to recommend a stop at $12, looking to achieve $19.00 -- upside potential of 17%. Yield 0.3%
(Analysts’ price target is $19.00)
Our PAST TOP PICK with VIRC has triggered its stop at $12. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 16%, when combined with our previous guidance.