| Stock (Symbol) | Stock Price | |
Restoration Hardware (RH) |
$99 |
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| Data is as of | Expected to Report | Sector |
June 29, 2015 |
Sept 8 – Sept 14 |
Retail & Travel |
| Sharek’s Take | ||
 Restoration Hardware is having a renaissance. The furniture retailer has gotten away from the small stores in shopping centers and moved into big free-standing mansions with up to 60,000 square ft of selling space for its high-end furniture and accessories. This transformation has been a huge success as profits could surge to $3 this year, triple what it made 3 years ago. And estimates look as good as the furniture does with 25%, 37%, 33% and 48% qtrly profit growth expected the next 4 qtrs. The company has another catalyst coming this Fall, its RH Modern which will be a modern spinoff with items such as a white shag chaise lounge. Williams Sonoma is doing well now because its middle-class contemporary line West Elm is flourishing. I will purchase RH in the Growth Portfolio and Aggressive Growth Portfolio today. I feel this $99 stock is worth $109 this year and $136 in 2016. |
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| One-Year Chart | ||
 Although qtrly profits have been solid, the last 2 qtrs were held back by a West Coast port disruption. Once this passes profits could roll ahead 35% or more per qtr. RH is on the cusp of breaking out. I love the Est LTG of 27%. |
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| Earnings Table | ||
 Revenue was hurt by the port disruption, yet still increased 15%, but slower than the 24% 2QtrsAgo. Profits increased 28% last qtr.RH beat the street by 3 cents last qtr. Annual Profit Estimates increased a bit but I just started following the stock and have little history. Quarterly estimates look excellent with good accelerating profit growth lying ahead if all goes right. |
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| Fair Value | ||
 RH made just $1 in 2012 and is now set to make $3 in 2015 — a triple in three years. The stock is also 10% undervalued right now. Although upside to 2016 is a solid 37%, I feel this stock has to ability to compound every three years. |
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| Ten-Year Chart | ||
 RH used to be under the ticker RSTO. I remember keeping up with it, but the company wasn’t doing well in shopping centers and went private at $4.50 a share in 2008. It then IPO’d again in November 2012 and opened at $32 a share. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
7 of 24 |
Restoration Hardware might be the best retail stock to invest in right now. The concept is working and its new modern concept should propel the company to even greater heights. Profits and the stock have the ability to double in 2-3 years. |
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Aggressive Growth Portfolio
6 of 10 |
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