Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, musical instrument maker Steinway Musical Instruments (NYSE: LVB ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Steinway's business and see what CAPS investors are saying about the stock right now.
Steinway facts
| Headquarters (Founded) |
Waltham, Mass. (1993) |
| Market Cap |
$297.4 million |
| Industry |
Leisure products |
| Trailing-12-Month Revenue |
$322.5 million |
| Management |
CEO Dana Messina
CFO Dennis Hanson
|
| Return on Equity (Average, Past 3 Years) |
3.5% |
| Cash/Debt |
$107.1 million / $154.5 million |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 93% of the 57 members who have rated Steinway believe the stock will outperform the S&P 500 going forward. These bulls include AnchorageAK and All-Star ikkyu2, who is ranked in the top 3% of our community.
Late last year, AnchorageAK tapped Steinway as a sweet-sounding selection: "Resurgence of spending on high-end luxury goods will fuel profitable growth. Their brands include the most respected names in musical instruments: Steinway, Selmer, Bach."
Currently, Steinway even sports a cheapish price-to-cash flow of 11.6. That represents a clear discount to other recreational goods stocks like Brunswick (NYSE: BC ) (21.1), Pool Corp. (Nasdaq: POOL ) (18.5), and Winnebago Industries (NYSE: WGO ) (30.7).
CAPS All-Star ikkyu2 offers a balanced look at the special situation:
This is a speculative pick. An activist has recently acquired 10% of the shares and encouraged new blood on the board -- thanks for alerting me to this, TMF. The company has had positive earnings in 11 of the last 12 quarters. And Steinway pianos, last I checked, were still magnificent instruments considered best of breed, though Yamaha may have made significant inroads to their share over the last 3 decades.
The company has anemic returns on invested capital and on equity, however; and their debt to equity ratio is 67%, meaning that their real profit margins after interest is paid are pretty slim.
What do you think about Steinway, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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