Have you taken advantage of Leggett & Platt, Incorporated 's LEG bull-run yet? If not, then you must take a look at this leading furniture company, which has seen its stock price surge 25.6% on a year-to-date basis, gaining from its strategic growth plans, efforts to boost business portfolio and disciplined capital allocation practices.
In fact, we believe that these factors helped the Zacks Rank #2 (Buy) stock to hit a 52-week high of $51.40 on the last trading day, Jul 1, 2016, before eventually closing at $50.83.
LEGGETT & PLATT Price and Consensus
Leggett has been progressing much in line with its long-term growth strategy, which was announced in Nov 2007. The company has already completed the first two parts of its strategic plan with success, which included divesting low-performing businesses and improving margins and returns. Leggett is now working on the third part of the plan, which aims to achieve top-line growth of 4%-5% annually.
Further, as part of this long-term plan, the company remains focused on boosting its business portfolio by increasing investment in areas that provide a competitive edge, and simultaneously exiting underperforming operations and markets. In this regard, the company has made several profitable acquisitions, while it divested a major part of its Stores Fixtures business and continues to pursue the sale of the two remaining facilities in this business.
Taking a look at Leggett's earnings history, we note that the company has displayed a splendid performance. Its bottom line has outperformed the Zacks Consensus Estimate for three straight quarters now, with an impressive average beat of 18.8%. Moreover, driven by solid unit volume growth across many businesses, the company raised its earnings and EBITDA margin outlook for 2016, following its first-quarter results, thus underscoring management's confidence in its future prospects.
Alongside, Leggett has always maintained a disciplined capital allocation strategy, focused on making investments to develop its business, while using the excess cash to enhance shareholder returns through dividend payouts and share buybacks. Furthermore, the company expects to generate substantial future cash flows, as it is rationalizing capital expenditures, including store-remerchandising efforts to improve its return on investment. We believe that Leggett's strong liquidity position will help drive future growth.
All these factors highlight Leggett's solid potential and instill confidence among investors. Thus, if you haven't considered investing in Leggett yet, remember - better late than never!
In fact, apart from Leggett, many other stocks hit 52-week highs on Friday, like Colgate-Palmolive Co. CL , B&G Foods Inc. BGS and The Clorox Company CLX , which hit highs of $73.42, $48.44 and $138.86, respectively, on Jul 1.
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