What happened

Leggett & Platt (NYSE:LEG) shares beat the market by a wide margin last month as the stock gained 25% compared to a 2% increase in the S&P 500, according to S&P Global Market Intelligence. The boost put shareholders up solidly so far in 2019, with the stock up 43% compared to a 22% surge in the S&P 500.

A woman shops for a mattress.

Image source: Getty Images.

So what

The catalyst for the October rally was solid fiscal third-quarter earnings results. Leggett & Platt said late in the month that sales rose 14% to beat the expectations of most investors who follow the stock. Those gains came mainly from the company's recent acquisitions, but organic growth benefited from market share growth in the company's automotive division.

Now what

Demand for bedding materials is surging, but Leggett & Platt's short-term future is clouded by a few challenges, such as the exit of its home furnishings segment and tariff-related disruptions impacting products in the industrial segment.

Still, CEO Karl Glassman and his team are confident that the consumer staples giant's sales will rise by over 10% this year as acquisitions more than offset an expected organic sales decline of between 3% and 5%. Given that mixed outlook, investors might want to wait for more clarity on the business before buying into this surging stock.

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