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
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.
|Headquarters (Founded)||Waltham, Mass. (1993)|
|Market Cap||$297.4 million|
|Trailing-12-Month Revenue||$322.5 million|
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
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.
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