Wednesday, July 22, 2009

Leon's Furniture 2

I am continuing my review this stock (TSX-LNF) today. As I said yesterday, I have not reviewed it since I received the annual report for the end of December 2008. I have held this stock since 2006. I have faith in this company for the long term and I will continue to hold this stock. I first bought it because I read a recommendation on this stock and I liked what they said.

When I look at Insider Buying and Insider Selling on this stock, I find there is more Insider Buying. There is not much of each going on. Since the Leon family owns some 68% of this stock, there is probably not much room for them to buy more in any case. I do not mind holding stock owned by a family. They often take great care of their companies as they have much to lose if they do not.

Next, I looked at the spreadsheet ratios. I find that the current yield of 2.8% is slightly higher than the 5 year average yield of 2.3%. The current P/E at 12.2 is higher than the 5 year average of 14.5 and at about the same as the 5 year low. The current stock price and the Graham Price are about the same. All these ratios point to a somewhat good current price. However, the current Price/Book Value ratio is only about 70% of the 10 year average and this is a strong suggestion that the current price is good.

When looking for analyst recommendations, I can only find two, one a Strong Buy and one a Hold. (See my site for information on analyst ratings.) Neither analyst thinks that 2009or 2010 will be great years for this company. However, they seem to suggest the earnings will go back to 2007 earnings. This is not bad.

I do not really see any problems with this stock. We are in a recession, so it is only natural that a furniture sales company will see some earnings problems. But recessions do not last forever and I will hold on to my shares in this company.

This company sells home furnishings, appliances and electronics through a chain of retail facilities and franchises located in Canada. Its web site is See my spreadsheet at

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets.

No comments:

Post a Comment