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Hooker Furniture Corp. Message Board

  • cpa38 cpa38 Nov 10, 2003 4:52 PM Flag

    This move's not making sense

    The playbook says buy consumer durables coming out of a recession. And, I suspect that's what's driving this stock - institutions blindly buying based on the playbook. But the characteristics of this recession don't match those of previous recessions. Low interest rates and high housing activity kept this and other furniture players strong throughout this recession. As a result, the huge bounce we normally get coming out of a recession won't be happening this time. You don't have to look much further than the results reported by LZB this evening to see why this is the case and why HOFT is overvalued.

    HOFT has been driven higher based on the institutional playbook in relation to economic cycles. Pain is coming when the institutions wake up to the fact that the playbook isn't worth a crap for this cycle. This cycle is different. There will be only a muted bounce in consumer durables.

    HOFT is a $20 stock selling for $40. It's a screaming short at these levels.

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HOFT
15.41+0.03(+0.20%)Jul 22 4:00 PMEDT

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