7/21/2013

Two Small Cap Value Ideas , Mean Reversion Potential within the Same Industry

STLY: Stanley Furniture and NTZ: Natuzzi have both significantly under performed their industry (Home Furnishings) based on the stock returns,P/B,P/S and other metrics. Quotes for STLY and NTZ


STLY: Stanley Furniture Co. Inc founded in 1924 is based in Virginia. STLY "designs, manufactures, and imports wood furniture for the residential market in the United States".

Stock performance for the one year period was -12.20% versus the  industry's  return of -.27%, 3 year stock return was -.27% versus industry's  30.82%.
A modest decrease in shares outstanding over the past 52 weeks, along with a  stronger financial position, an increases in net tangible assets to price along with optimistic management comments over the past year.

"The most recent quarter represented a significant milestone for our company's multi-year journey to reposition itself for growth," commented Glenn Prillaman, President and Chief Executive Officer. "As we begin the second half of the year, we have now either completed or are simply refining the multiple initiatives that we believe have been necessary for long-term growth but very disruptive to our customers and management team over the last few years. With these distractions behind us, we are now completely focused on the execution of our operating models which should make us one of the most customer-friendly companies within our segment of the marketplace," continued Prillaman. "Specifically, our accomplishments in the quarter included the successful relocation of our corporate office, the opening of our new High Point showroom to wonderful reviews and a well-attended April Furniture Market and the introduction of our new staff to"

Strong insider purchase activity also supports recent optimistic management comments. YTD 2013 insiders purchased of 4,553 shares for 19,713 or 4.32 per share, 2012 had 17,269 shares purchased for 78,147 or 4.52 per share.2011 30,807 shares for 103,860 or 3.37 per share.

Current price = $3.67

Market Cap: 53.16M , Enterprise Value:  31.92M
Trailing P/E (ttm):   1.77 ,  Price/Sales (ttm):      0.54
Price/Book (mrq):   0.63 , Enterprise Value/Revenue (ttm):        0.33
Revenue (ttm):  97.84M , Revenue Per Share (ttm):        6.85
Qtrly Revenue Growth (yoy):     -2.70% , Gross Profit (ttm):     12.20M
Net Income Avl to Common (ttm): 29.85M , Diluted EPS (ttm):      2.07
Total Cash (mrq):        26.60M ,Total Cash Per Share (mrq):     1.84
Total Debt (mrq):       0.00 , Current Ratio (mrq):    7.25
Book Value Per Share (mrq):     5.87
52-Week Change3:        -12.62%
52-Week High (Oct 1, 2012:    5.00 , 52-Week Low (Jul 18, 2013):    3.55
% Held by Insiders:    3.92% ,% Held by Institutions1:        70.50%

NTZ: Natuzzi an Italian internationally recognized designer, manufacturer and marketer of furniture.The company was founded in 1959 and headquartered in Santeramo Colle, Italy. As of March 31, 2013, "it had 99 Divani & Divani by Natuzzi stores, and 186 Natuzzi Italia stores, as well as 314 Natuzzi galleries".

Stock performance for the one year period was -21.97% versus the industry's 53.72%, 3 year stock return was -15.30% versus industry's 30.82%.

This turnaround deep value play announced lay offs over the prior month. 1,726 employee layoffs are planned as part of its reorganization of operations following six-years of operating losses. But on June 5th the Italian government has asked furniture group Natuzzi to suspend plans to lay off 1,700 workers as part of a restructuring program, and the company is considering its request.   So at least management recognizes the severity of the need to restructure.


Current Price = 2.06 

Market Cap : 112.45M ,Enterprise Value (Jul 21, 2013): 75.21M
Price/Sales (ttm): 0.19: Industry = 1.10
Price/Book (mrq): 0.31 : Industry = 2.90
Enterprise Value/Revenue (ttm): 0.12 versus Industry P/S of 1.10

Revenue (ttm): 607.40M
Revenue Per Share (ttm): 11.15
Qtrly Revenue Growth (yoy): 0.30%
Gross Profit (ttm): 204.35M versus EV of 75.M and Market Cap of 112.45
EBITDA (ttm)6: -581.32K

Balance Sheet
Total Cash (mrq): 93.22M ,Total Cash Per Share (mrq): 1.71
Total Debt (mrq): 56.06M 
Current Ratio (mrq): 2.21
Book Value Per Share (mrq): 6.65

52-Week Change3: -17.06%

52-Week High (Jul 23, 2012): 2.70
52-Week Low (Nov 19, 2012): 1.77
Shares Outstanding: 54.54M
Float: 21.78M

% Held by Insiders: 5.03%
% Held by Institutions: 31.40%