Why Restoration Hardware Holdings, Inc. Popped Today

Is this meaningful or just another movement?

Mar 28, 2014 at 12:24PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of home furnishings retailer Restoration Hardware Holdings, Inc. (NYSE:RH) soared 13% today after its quarterly results and outlook topped Wall Street expectations.

So what: The stock has been sluggish in recent months on concerns over slowing growth, but Restoration's Q4 results -- adjusted EPS soared 38% on revenue growth of 33% -- coupled with upbeat guidance are quickly easing those worries. In fact, same-store sales during the quarter increased 17% while comparable brand revenue jumped 31%, suggesting that its competitive position is strengthening as well.

Now what: Management now sees Q1 EPS of $0.09-$0.11 on revenue of $345 million-$350 million, versus Wall Street's view of $0.07 and $349.3 million. "As we enter 2014, we remain focused on our two largest value driving strategies -- the expansion of our offer and the transformation of our retail stores," said Chairman and CEO Gary Friedman. "The expansion of our offer will be highlighted across 3,200 pages in our Spring 2014 Source Books, positioning us for what we believe will be another year of industry leading results." Of course, with the stock now up about 125% from its 52-week lows and trading at a 25-plus forward P/E, I'd hold out for a wider margin of safety before buying that bullishness. 

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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