4-Star Stocks Poised to Pop: Tempur-Pedic

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mattress maker Tempur-Pedic International (NYSE: TPX  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Tempur-Pedic's business and see what CAPS investors are saying about the stock right now.

Tempur-Pedic facts

Headquarters (founded) Lexington, Ky. (1989)
Market Cap $2 billion
Industry Home furnishings
Trailing-12-Month Revenue $1.5 billion
Management CEO Mark Sarvary (since 2008)
CFO Dale Williams (since 2003)
Return on Capital (average, past 3 years) 30.1%
Cash/Debt $134.2 million / $683.7 million
Competitors Sealy
Serta

Simmons Bedding

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 92% of the 703 members who have rated Tempur-Pedic believe the stock will outperform the S&P 500 going forward.  

A couple of months ago, one of those bulls, WealthLift, tapped the stock as a beaten-down bargain opportunity:

The markets are viewing [Tempur-Pedic] as a clear straggler in its industry, but the fundamentals indicate that this is simply not the case. This is still the same company that grew its EPS and cash flows by impressive annual rates since the recession, while sporting solid margins, so it's not fair to completely forget these attributes. Such is life in our current market environment however, as investors remain ready to dump their holdings on a whim.

If you want market-thumping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, Tempur-Pedic may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Tempur-Pedic. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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