Leon's Furniture (LNF-T)

How do you feel about the consumer? This name is based on sentiment and consumer's comfort with buying big-ticket items. Dominant player in Canada. He wants companies that can grow 20+% a year, and he struggles with being able to sell 20% more couches, etc. Conservative choice. Don't buy right now.

Just because a stock's dropped in price, it doesn't mean it's necessarily a good time to buy.

It has executed very well over the long run and works on cost structures. There could be another special dividend. It has lots of real estate and wants spin off a REIT. However a lot of their properties are not in the greatest areas so the REIT may not do as well as others. You could buy on the pullback and wait for a pop when/if the REIT is spun out. 

Incredibly well run. USD has an impact on them, as a lot of furniture comes from the US. Can expand. Big-ticket items may be challenged in short term. Increases dividend regularly. Pulled back, good time to buy. Watch for monetization of real estate holdings.

Flat revenue for past few years, but Covid-19 helped.
Key issue is long term growth for the business.
High single digit growth not enough during recession.
Higher interest rates makes it harder for consumers to pay for discretionary items.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. eCommerce growth has been sticky. Strong growing top-line sales. Buyback program improves valuation. Inventory levels rising. Unlock Premium - Try 5i Free

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. eCommerce growth has been sticky. Strong growing top-line sales. Buyback program improves valuation. Inventory levels rising. Unlock Premium - Try 5i Free

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Leon’s Furniture Limited (LNF) stock was up 10.72% on the month. LNF is the largest network of home furniture, appliances, electronics, and mattress stores in Canada. The Company operates five e-commerce sites and its repair service division. Adjusted diluted earnings per share at $0.70 per share were up 20.7%. Unlock Premium - Try 5i Free

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Would not do anything for their tender offer. They have committed to buying back $200M of their shares. The stock is cheap with a good outlook. The company knows its business and is committing $200M to prove the stock is undervalued. Unlock Premium - Try 5i Free

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Comfortable with a long-term position with its strong market share. Trading at 10x forward earnings, which is cheap compared to its history. This gives some downside protection. They announced a 10% stock buyback plan. Supply chain issues seem largely priced in. Unlock Premium - Try 5i Free