This little known, 100 year old, multi-national manufacturer does $2.8 billion a year in sales across the US, Europe, Africa, the Middle Ease, and Asia. It has seen double digit revenue growth over the past few years and estimates are that is will continue this trend in the coming year. They posted and EPS of $.25 for the previous quarter, up from $.15 the previous year. Net Income was $78.7 million. It has a forward P/E of 11.34, and a market cap of $1.43 billion.
The company’s earnings are very sensitive to 2 items; the price of raw materials (steel, aluminum), and the strength of the dollar. As steel production is increasing in China and India, the cost to steel consumers like Steelcase is on the decline. This has a significant impact on the EPS and operating income. According to their annual report, a 1% increase in commodity prices can affect operating by as much as $20 million.
Take a look at the 1yr chart. Since October, the stock has been trading above its 50-day. We can see a clean break away after a bounce off the trend line. With earnings coming out next month, I would expect to see a large advance of this stock on any positive surprise.
It is currently trading at 11.45. I give it an annual price target of 15.