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Does Hooker Furniture Corporation’s (NASDAQ:HOFT) Recent Track Record Look Strong?

Joseph Holm

For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Hooker Furniture Corporation’s (NASDAQ:HOFT) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for Hooker Furniture

Could HOFT beat the long-term trend and outperform its industry?

I look at data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This allows me to analyze many different companies in a uniform manner using new information. For Hooker Furniture, its latest earnings (trailing twelve month) is US$30.63M, which, relative to the previous year’s figure, has increased by a non-trivial 66.67%. Since these values are somewhat myopic, I’ve determined an annualized five-year value for Hooker Furniture’s net income, which stands at US$12.65M This shows that, generally, Hooker Furniture has been able to increasingly grow its net income over the past couple of years as well.

NasdaqGS:HOFT Income Statement Mar 30th 18

What’s enabled this growth? Well, let’s take a look at whether it is merely due to industry tailwinds, or if Hooker Furniture has seen some company-specific growth. Over the past few years, Hooker Furniture grew its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US consumer durables industry has been growing, albeit, at a subdued single-digit rate of 6.63% in the prior year, and a substantial 13.73% over the past half a decade. This suggests that whatever uplift the industry is gaining from, Hooker Furniture is able to amplify this to its advantage.

What does this mean?

Though Hooker Furniture’s past data is helpful, it is only one aspect of my investment thesis. While Hooker Furniture has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Hooker Furniture to get a more holistic view of the stock by looking at:

  • 1. Future Outlook: What are well-informed industry analysts predicting for HOFT’s future growth? Take a look at our free research report of analyst consensus for HOFT’s outlook.
  • 2. Financial Health: Is HOFT’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  • 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 29 October 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.