10-16-2013, 10:57 AM
(10-16-2013, 08:45 AM)hendi_alex Wrote: I would take a more positive view of LEG. While not holding the stock, would be reasonably comfortable with LEG, which I did hold for a couple of years. What I'm thinking is that while earnings growth has stagnated over the past five years, this is a consumer discretionary company, and the economy has not rebounded as in most recoveries. When and if the economy would return to robust growth, and people start replacing those big ticker consumables, LEG will have a very robust period of earnings growth. The company is well managed, has a wide array of products, has kept debt to a low level, has about $2 per share cash on hand. They are simply waiting on the economy to catch up so that they can ratchet up production.
I can't disagree with anything you said there. I think there is potential upside in a growing economy and I do think the company is well run and has shareholder's interests in mind.
However, after looking more closely at the 10 and 20 year returns and slowing dividend growth I decided to go in another direction.