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Bull of the Day: Lumber Liquidators (LL)

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It doesn’t take a rocket scientist to figure out that lumber is an industry you want to be in right now. After all, lumber prices have more than quadrupled in the last year or so. Owning lumber mills are the place to be right now, but how long can that last? None of the mills are rushing to put more production online because they’ve all learned from the last boom-bust cycle. This won’t last forever, and it takes a good chunk of up-front investment to get new lumber mills churning out wood.

Check out your local home improvement store and you’re going to gasp at the price of a sheet of plywood. Retailers selling wood products like flooring are enjoying higher pricing which they are passing on to the consumer. Their margins are strong and their bottom lines are even better.

It should then come as no surprise to hear that today’s Bull of the Day is Lumber Liquidators (LL - Free Report) . Lumber Liquidators Holdings, Inc., together with its subsidiaries, operates as a multi-channel specialty retailer of hard-surface flooring, and hard-surface flooring enhancements and accessories. The company offers hardwood species; engineered hardwood, laminate, resilient vinyl, water-resistant vinyl plank, and porcelain tile flooring products; renewable flooring, and bamboo and cork products; and a selection of flooring enhancements and accessories, including moldings, noise-reducing underlayments, adhesives, and flooring tools under the Bellawood and Coreluxe brand. It also provides in-home delivery and installation services. 

While lumber is in the name, its not the only reason this stock is rocking and rolling. A red-hot housing market is certainly helping. People are not only spending money on snazzing up their homes to sell, but they are remodeling after they move. It’s introducing an incredible amount of demand into this industry. Lumber Liquidators is currently a Zacks Rank #1 (Strong Buy) with the distinction of having a Zacks Value Style Score of A, Growth of B and Momentum of B to help it round out with a VGM Composite Score of A. The Building Products – Retail Industry ranks in the Top 16% of our Zacks Industry Rank, making this a hot stock in a hot industry.

The reason for the Zacks Rank is the recent earnings estimate revisions coming from analysts. Over the last 30 days, three analysts have increased their estimates for the current year while one has done so for next year. The bullish revisions have shot up our Zacks Consensus Estimates from $1.15 to $1.36 for the current year while next year’s number has gone up from $1.22 to $1.41.

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