Have You Missed the Opportunity to Make Money on the Housing Recovery? – Lowe’s Companies, Inc. (LOW)

Lumber Liquidators Holdings Inc (NYSE:LL): There are a number of very compelling reasons to like this story. One of the keys to the investment story is how much higher gross margins can rise, as previous management commentary has suggested a ceiling of ~40% that the market seems to accept. Given the company’s direct sourcing moves and the competitive advantages LL has over peers, the Street sees it pushing gross margins beyond the 40% range, which should put it in the select group of rapid-growth retailers with years of growth ahead. In addition, continued improvements in the housing backdrop should result in a meaningful tailwind, as LL expands rapidly into a fragmented marketplace. While expectations are high in the near term, this story has a number of drivers and is not well liked, setting up for potentially significant upside in 2013.

Foolish Bottom Line

So don’t waste time and invest in the home retailer space in order to benefit from the housing recovery.

The article Have You Missed the Opportunity to Make Money on the Housing Recovery? originally appeared on Fool.com and is written by Masam Abbas.

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