Bassett: Special Dividend On Strong Sales And Orders

Seeking AlphaLong Ideas | Consumer Bassett: Special Dividend On Strong Sales And OrdersDec. 8, 2020 8:39 AM ET|| About: Bassett Furniture Industries, Incorporated (BSET), Includes: FLXS, HOFT, HVTby: Value Investment PrincipalsValue Investment Principals Small-cap, Deep ValueSummary$0.25 special dividend announced on Dec. 4.
Wholesale orders and shipments increased YoY by 26% and 9%, respectively.
Record backlog levels, strong cash balance of $4.82/share (27% of the current stock price), and 9.4% FCF yield on FY21.
Bassett continues to be a beneficiary of the housing surge; a pure-housing play.
We wrote about this stock in early September and it is up almost 50%. We predict, given the strong valuation metrics, that it will go up a further 50%.
Bassett Continues to be Robust this Fiscal Year
Bassett (BSET) has completed their fourth quarter ended in November. For the quarter, they have reported a strong wholesale order rate increase to 26% YoY, a shipments increase of 9% over the prior year quarter, in spite of them having 7 fewer corporate stores [or 10% of the total corporate store base]. The company is also set to benefit from the restructuring of its business which was carried out in May, further developing on their e-business and marketing strategies. Rob Spilman, Chairman and CEO, had the following further remarks to add on the wholesale segment, the recent special dividend [see next section] and guidance going forward:
"As a result [of the strong wholesale this quarter], our backlogs are at record levels and our balance sheet has strengthened to the point that we believe this distribution of capital is appropriate. Looking ahead, we will remain conservative in the management of our balance sheet while prudently investing in the business as we monitor the ongoing uncertainty around the COVID-19 pandemic."
Source: 10-K; Wholesale & Retail are approximately equal and are the largest top-line segments.
We are extremely pleased and... Read more