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Flexsteel Industries Inc. Message Board

  • vsaether vsaether Mar 16, 2010 1:21 PM Flag

    Any news out there to back up the recent run-up?

    FLXS continues the run higher on above average volume (although it's still fairly modest relative to shares outstanding of 6.6M) without any public news... 40K shares yesterday, 20K through first half of today, 60K on March 8th... any ideas what's driving it higher and where the interest is coming from? I realize this is a value stock, but with a trailing P/E of 33 and 5 cents/quarter dividend (1.25% yield), somebody's baking in a rosy future here... or an acquisition. Up more than 50% YTD. I'm long, but wondering if it's time to take some profits.

    Any ideas?

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    • vsaether:

      My assessment of the situation is that FLXS is reasonably priced currently. It never should have gone to $5. It is currently trading near book value and book value is conservatively stated with no goodwill or other intangibles and no debt. That is unusual for the furniture industry.

      Another influence is that investors like to buy small cap value stocks as the economy emerges from a recession because the stocks became undervalued during the recession and now the future looks brighter.

      Finally the momentum buyers like to buy stocks that are going up rapidly and FLXS currently qualifies since it has tripled from its low. When this will end is anybodys guess. Also, it is not just FLXS. Most furniture stocks have gone up considerably from their lows. LZB went from $.60 to over $14.

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