Why I’m Selling My Lumber Liquidators Holdings Inc (LL) Shares

Source: Seeking Alpha.

Realizing this, Zhou had the Mayflower brand tested by a second lab, the NTA. The results from NTA came back showing “noncompliance,” though Zhou did not identify what the ppm reading was from the lab.

What this means
Does this mean that Lumber Liquidators is definitely guilty of selling carcinogenic products to unaware consumers? Not necessarily. I find it a little odd that Zhou didn’t include the ppm reading from NTA, and Zhou’s sample size was admittedly tiny.

But something tells me that this may be a problem for Lumber Liquidators Holdings Inc (NYSE:LL). If formaldehyde does end up being an issue with China-sourced products, the company may have to pay a lot of money for testing and replacing millions of square feet of flooring throughout the country.

Then again, nothing at all may come of these allegations.

But with the stock now trading for almost 40 times earnings and 55 times free cash flow, I think there’s more risk than there is reward right now, and there are better places to invest my money.

And to be completely transparent, I am not allowed — per Motley Fool trading rules — to sell my shares of Lumber Liquidators until Friday.

Fool contributor Brian Stoffel owns shares of Lumber Liquidators. The Motley Fool recommends and owns shares of Lumber Liquidators Holdings Inc (NYSE:LL).

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