Another Select Comfort Corp. (SCSS) Sell-Off, Another Buy Opportunity

Over the past two years or so, Select Comfort Corp. (NASDAQ:SCSS) has traded above 17 times earnings and, typically, somewhere in the low to mid 20s. Part of this is factored into the fast growth the company was experiencing, but the company’s growth is by no means over. At under 15 times 2014 estimates, Select Comfort looks to be the least expensive it has been in some time. For comparison, Tempur-Pedic International Inc. (NYSE:TPX) is a company nearly twice as large as Select Comfort, at a market cap of $2.67 billion, and trading at a similar forward multiple (13.26).

As mentioned, these mattress stocks are very volatile, and Select Comfort Corp. (NASDAQ:SCSS) rattled investor’s confidence with the sharp drop in profits. But the long-term prospects remain good for the company, with an ongoing housing recovery, and smart, strategic management. Investors should view the current pullback as a possible opportunity

Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool owns shares of Tempur-Pedic International.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.