Last week I purchased 46 shares of Lumber Liquidators Holdings Inc., (NYSE: LL) stock at $34.25 per share, totaling $1,575.91. Lumber Liquidators does not pay a dividend, so this purchase adds no new money to my annual dividend income. LL is the latest addition to my Investment Hunting portfolio. I typically purchase dividend paying stocks, however, on occasion I buy stocks that I believe will see major share price increases in a short time-frame. Earlier this year I took a chance on PBR, and this has proven to be a great short-term investment.
An Overview of Lumber Liquidators
Lumber Liquidators Holdings, Inc. is a retailer of hardwood flooring in North America. The Company offers an extensive selection of premium hardwood flooring products under multiple proprietary brands at low prices designed to appeal to a diverse customer base. The Company and its subsidiaries operate through a network of around 318 LL stores with 309 located throughout the United States and nine in Ontario, Canada. The Company offers an extensive assortment of exotic and domestic hardwood species, engineered hardwood, laminate, vinyl plank, bamboo and cork direct to the consumer. It also provides a wide selection of flooring enhancements and accessories, including moldings, noise-reducing underlay, adhesives and flooring tools. The Company’s customer is the homeowner, or a contractor on behalf of a homeowner. The Company’s subsidiaries include Lumber Liquidators, Inc., Lumber Liquidators Services, LLC and Lumber Liquidators Canada Inc. Source: http://www.schwab.com
Lumber Liquidators Recent History
Lumber Liquidators has had a very bad start to 2015. On March 1st, 2015 the CBS television news show 60 Minutes covered a story titled “Lumber Liquidators Tied To Health And Safety Violations.” 60 Minutes claimed that the laminated wood LL sourced from suppliers in China contained more formaldehyde than its domestically sourced laminates and similar products sold by competitors. The report claimed that this laminate flooring contained dangerous levels of formaldehyde.
Lumber Liquidators P/E Ratio And Stock Price
F.A.S.T Graphs shows that LL currently has a P/E Ratio of 17.1 which is well below its average P/E Ratio of 29.1.
In the last 45 days, Lumber Liquidators stock price dropped from a high of $69.99 to a low of $27.15. The stock closed at $32.37 on Friday, April 17th.
Lumber Liquidators Conclusion
Investing in LL now is a risk, however all investing is risky. I have decided to take a chance on a company experiencing hard times. I have done so in the past and had great results. Last year I bought Target immediately following their data breach and this proved to be a very wise investment. Will Lumbar Liquidators bounce back like Target did? Only time will tell. I have risked a small amount money with the hope that I can double or triple my money in 12-months.
What is your opinion of Lumber Liquidators? Do you think the company will bounce back or will the stock continue to drop?
Full Disclosure: Long LL, TGT, PBR