Haverty Furniture Companies, Inc. $HVT
1. Is the company undervalued?
EV/Sales: 0.48
EV/EBIT: 4.17
Price/Book: 1.76
*Please note I’m backing out operating leases and customer deposits in the calculation of Enterprise value here *


$HVT is a cyclical stock that’s inexplicably performing well in this environment, with sales up 5.4% YOY and margins expanding in the latest quarter. Having said that the company is expecting a slowdown next year in both sales and earnings. Nevertheless the stock is trading at bargain basement prices with effectively zero solvency concerns. Furthermore $HVT has ample runway left to keep opening new stores while maintaining a shareholder friendly capital return policy. To quote Monish Prabrai $HVT seems like a “Heads I win, tails I don’t lose much” thesis.

Link to full write-up here:

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