5-Star Stocks Poised to Pop: Lumber Liquidators

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, hardwood flooring retailer Lumber Liquidators Holdings (NYS: LL) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Lumber Liquidators' business and see what CAPS investors are saying about the stock right now.

Lumber Liquidators facts

Headquarters (Founded)Toano, Va. (1994)
Market Cap$486 million
IndustryHome improvement retail
Trailing-12-Month Revenue$660 million
ManagementPresident/COO Robert Lynch (will succeed retiring CEO Jeffrey Griffiths on Jan. 1)
CFO Daniel Terrell
Return on Equity (Average, Past 3 Years)17%
Cash/Debt$37.8 million / $0
CompetitorsHome Depot (NYS: HD)
Lowe's (NYS: LOW)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 627 members who have rated Lumber Liquidators believe the stock will outperform the S&P 500 going forward. These bulls include All-Star Millsteen, who is ranked in the top 10% of our community, and Dwest15.

This past summer, Millsteen listed several of Lumber Liquidators' positives: "Knowledgeable sales staff, competitive prices, experts in flooring a category where Home Depot and Lowes fail because of poor training."

Lumber Liquidators boasts almost $38 million in cash on its balance sheet with zero debt. Meanwhile, big-box retailers like Home Depot, Lowe's, and Wal-Mart (NYS: WMT) sport debt-to-equity ratios of 0.6, 0.4, and 0.8, respectively.

CAPS member Dwest15 elaborates on the bull case:

[Lumber Liquidators] will continue to have success as long as they continue to focus on their core business. Their niche in the market is serving quality flooring at a great rate while not bothering with the other hardware store stuff. Also [Robert Lynch] has done a tremendous job at turning the supply chains around. Looking forward to see what he can bring to the table.

What do you think about Lumber Liquidators, 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!

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Lumber Liquidators and Wal-Mart. Motley Fool newsletter services have recommended buying shares of Lumber Liquidators, Home Depot, Lowe's, and Wal-Mart, as well as writing covered calls on Lowe's and creating a diagonal call position on Wal-Mart. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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