Hooker Furniture: Steady Dividend Growth With Rising Demand

Seeking AlphaLong Ideas | Consumer Hooker Furniture: Steady Dividend Growth With Rising DemandJul. 2, 2020 5:46 PM ET|| About: Hooker Furniture Corporation (HOFT), Includes: BSET, BUY, CSB, ETH, FDM, FLXS, HVT, IWN, LCUT, LOVE, LZB, SNBR, URTY, UWM, VIRC, VTIby: Patrik MackovychPatrik Mackovych Long/short equity, medium-term horizon, macro, portfolio strategySummaryIndustrial production in the furniture segment probably hit bottom.
Increased tariffs cut the company's profitability in fiscal 2020 so that the company shifts its production.
COVID-19 outbreak and lockdown measures caused supply disruptions and demand shock but should not endanger its strong financial position. Data from Google Trends confirms a healthy recovery process.
The company declared dividends every quarter this year, has stable growth, and stock repurchase was announced.
Stock is highly undervalued according to Earnings power value, FCF, and other metrics.
Hooker Furniture Corporation (HOFT) is a financially stable company, which suffered in the current crisis due to lower demand and disruptions in the supply chain in the first quarter. However, these metrics have always been temporary, and there is a significant probability of a fast recovery as the lockdown restrictions had calmed down already. Industrial production in this sector is going to get better as reopening activities remain intact. Currently, we can see a significant downturn in industrial productions and news orders (lagging), but that's what the market priced in. The company has a dominant financial position and a position on the market as well, so any further mid-term disruptions should not endanger it. Data from Google Trends also confirms rising demand.

Source: gurufocus
Short introduction about the company
Hooker Furniture is slowing down but remains a stable growing business. One could say conservative. Despite slow growth, the company has been highly profitable for many years and in the past five... Read more