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Mohawk's Floor Is In - Barron's |
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| May 25, 2008 08:40 PM UTC |
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Tracked Blogger
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Via Long Investment Ideas from Seeking Alpha:
Shares of flooring company Mohawk Industries (MHK) are down more than 30% from last spring's highs, as Wall Street continues to worry how it will deal with soft housing sales and high energy and raw material costs. Barron's magazine is again bullish on the stock, noting it has transitioned itself from a carpeting specialist to a full-service flooring firm.<!----><!---->
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Sales of carpets and rugs in the U.S. grew at just 4.3% from 2002-2006, vs. 7.6% for ceramic tiles and 13.5% for do-it-yourself favorite laminate. This trend is not lost on Mohawk, which is also squeezing more generous profit margins out of its newer businesses. Carpet sales still count for more than half of its revenue, but only 17% of its operating income. Dal-Tile contributed 44% of its net income on just 25% of sales, and laminate unit Unilin chipped in another 40% on less than 25% of sales.Add Comment
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