The outbreak of the coronavirus pandemic and the resulting devastation of industries all over the globe pummeled several sectors to historic lows. Now that the pandemic is over, and markets are open, several sectors have started to recover, and one of these is the furniture industry.
In today's piece, we will take a look at some of the promising furniture stocks, with some top picks being The Lovesac Company (NASDAQ:LOVE), Arhaus, Inc. (NASDAQ:ARHS), and Kimball International, Inc. (NASDAQ:KBAL).
In order to pick out the top furniture stocks, we took a broad look at the industry to determine which players are performing well and in line with market trends and demands. They were then briefly analyzed through their financials and ranked through Insider Monkey's Q2 2022 survey of 895 hedge funds.
Bassett Furniture Industries, Incorporated (NASDAQ:BSET) is an American company that sells residential furniture in its home country and all over the globe. The firm sells its products through both its own stores and stores licensed out to licensees. The company is headquartered in Bassett, Virginia.
Bassett Furniture Industries, Incorporated (NASDAQ:BSET)'s latest quarter saw the firm grow its revenue by 12.5%, at a time when the housing industry was weakening due to high mortage rates spurred by the Federal Reserve's interest rate hikes. This quarter cemented the recent growth story, as the one before it saw Bassett Furniture Industries, Incorporated (NASDAQ:BSET) grow its EPS by a remarkable 43% annually, as it smashed analyst estimates out of the park.
Furthermore, Bassett Furniture Industries, Incorporated (NASDAQ:BSET)'s management appears optimistic about the company's future, as it rejected a $21/share acquisition offer in October 2022. The stock closed at $18.05 yesterday, implying that there's some growth in it. Bassett Furniture Industries, Incorporated (NASDAQ:BSET) pays a 16 cent dividend for a 3.54% yield, and its shares have grown by 4.75% this year, in the backdrop of inflation.
By the end of this year's second quarter, eight out of the 895 hedge funds surveyed by Insider Monkey had invested in the company.
Bassett Furniture Industries, Incorporated (NASDAQ:BSET)'s largest investor in our database is Mario Gabelli's GAMCO Investors which owns 678,483 shares that are worth $12 million.
Along with Arhaus, Inc. (NASDAQ:ARHS), The Lovesac Company (NASDAQ:LOVE), and Kimball International, Inc. (NASDAQ:KBAL), Bassett Furniture Industries, Incorporated (NASDAQ:BSET) is a top furniture stock.
Number of Hedge Fund Holders: 10
HNI Corporation (NYSE:HNI) sells workplace and residential furniture. Its products include office furniture such as storage, tables, and freestanding systems, and residential products such as fireplaces, stoves, and other accessories. The firm is headquartered in Muscatine, Iowa.
HNI Corporation (NYSE:HNI)'s second fiscal quarter saw the firm grow its revenue by 22% and earnings per share (EPS) by 30% annually. The revenue growth was fueled by both its office and residential businesses, which posted 18% and 21% growths, respectively.
At the same time, HNI Corporation (NYSE:HNI) also reported a strong order flow, with the orders for its office products growing by 4% and for the residential products by 14%. HNI Corporation (NYSE:HNI) pays a 32 cent dividend for a 3.62% yield, and ten out of the 895 hedge funds polled by Insider Monkey for their Q2 2022 holdings had held a stake in the company.
Out of these, Ken Griffin's Citadel Investment Group is HNI Corporation (NYSE:HNI)'s largest investor. It owns 175,562 shares that are worth $6 million.
Number of Hedge Fund Holders: 11
American Woodmark Corporation (NASDAQ:AMWD) is an American company that sells a variety of different products for the remodeling and construction of offices and homes. The firm has dozens of brands in its portfolio, and it is headquartered in Winchester, Virginia.
American Woodmark Corporation (NASDAQ:AMWD) reported 27% annual revenue growth in its first fiscal quarter, with a tally of $543 million beating analyst estimates by a wide margin. The company is also expected to weather the inflationary and housing market storms that have been brewing up, as it has a strong backlog that should last until the end of the fiscal year 2023 - at a time when the broader furniture industry is expected to witness a slowdown due to high mortgages.
Loop Capital increased American Woodmark Corporation (NASDAQ:AMWD)'s share price target to $49 from $47 in September 2022, stating that the company posted strong sales and revenue growth in its latest quarter. Insider Monkey studied 895 hedge fund holdings for this year's second quarter and found out that 11 had bought the company's shares.
American Woodmark Corporation (NASDAQ:AMWD)'s largest investor is Richard S. Pzena's Pzena Investment Management which owns 870,299 shares that are worth $39 million.
Number of Hedge Fund Holders: 12
Sleep Number Corporation (NASDAQ:SNBR) is an American company that designs and sells beds, pillows, sheets, and other sleeping products. The firm is headquartered in Minneapolis, Minnesota.
Sleep Number Corporation (NASDAQ:SNBR) has close to 700 retail locations across the U.S., which provide the firm with a strong footprint. The firm's latest quarter saw it grow its revenues by 13%, with the growth driven not only by its store expansion throughout this year, but also by larger volumes.
Sleep Number Corporation (NASDAQ:SNBR)'s price to earnings (P/E) ratio of 13.9 and its enterprise value to operating income (EV/EBITDA) ratio of 10.9 are among the highest in its peers, implying that the market expects it to do a lot more than its income statements suggest. As part of their second quarter of 2022 holdings, 12 out of the 895 hedge funds polled by Insider Monkey had bought the company's shares.
Number of Hedge Fund Holders: 12
Haverty Furniture Companies, Inc. (NYSE:HVT) is an American residential furniture company. The firm sells furniture, mattresses, upholstery, and eclectic looks. It is headquartered in Atlanta, Georgia.
Haverty Furniture Companies, Inc. (NYSE:HVT) has a fortress balance sheet with no debt and $144 million in cash and equivalent holdings - providing it with a solid footing to weather a potential recession. Another key factor is frequent share repurchases, which can prop up its share price even as market sentiment sours.
Haverty Furniture Companies, Inc. (NYSE:HVT) pays a 28 cent dividend for a 4.3% yield. Out of the 895 hedge funds surveyed by Insider Monkey for their Q2 2022 investments, 12 had owned a stake in the company.
Haverty Furniture Companies, Inc. (NYSE:HVT)'s largest investor is Jim Simons' Renaissance Technologies which owns one million shares that are worth $23 million.
Number of Hedge Fund Holders: 13
Ethan Allen Interiors Inc. (NYSE:ETD) is an interior design company and manufacturer and seller of home furnishings. The firm is headquartered in Danbury, Connecticut, and it sells a host of products which include upholstery items, home office furniture, drapery items, and home accent hardware.
Ethan Allen Interiors Inc. (NYSE:ETD) is facing high demand for its products alongside an equally strong pricing power, which saw the firm grow its revenue by 19% during its fiscal year 2022 despite shutting down stores and increasing prices at the same time. The strong demand is also evident in its 14% retail order growth and 17% warehouse order growth during the same fiscal year
Ethan Allen Interiors Inc. (NYSE:ETD) is also among the cheapest stocks in its peer list, courtesy of its low P/E and EV/EBITDA ratios. The company pays a 32 cent dividend for a 5.6% yield, and 13 out of the 895 hedge fund holdings studied by Insider Monkey during this year's second quarter had mentioned the stock.
Out of these, Chuck Royce's Royce & Associates is Ethan Allen Interiors Inc. (NYSE:ETD)'s largest investor through a $6.8 million stake that comes courtesy of 338,803 shares.
Ethan Allen Interiors Inc. (NYSE:ETD) joins our list of top furniture stocks, with some other notable picks being The Lovesac Company (NASDAQ:LOVE), Arhaus, Inc. (NASDAQ:ARHS), and Kimball International, Inc. (NASDAQ:KBAL).
Click to continue reading and see 5 Best Furniture-Related Stocks to Buy Now.
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Disclosure: None. 11 Best Furniture-Related Stocks to Buy Now is originally published on Insider Monkey.
