4-Star Stocks Poised to Pop: Tempur-Pedic

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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, mattress maker Tempur-Pedic International (NYS: TPX) has earned a respected four-star ranking.

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

Tempur-Pedic facts

Headquarters (founded)Lexington, Ky. (1989)
Market Cap$3.0 billion
IndustryHome furnishings
Trailing-12-Month Revenue$1.5 billion
ManagementCEO Mark Sarvary (since 2008)
CFO Dale Williams (since 2003)
Return on Capital (average, past 3 years)29.8%
Cash/Debt$134.0 million / $566.2 million
CompetitorsSealy
Serta
Simmons Bedding

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

On CAPS, 92% of the 653 members who have rated Tempur-Pedic believe the stock will outperform the S&P 500 going forward.  

Earlier this month, one of those Fools, troym72, tapped Tempur-Pedic as a timely turnaround opportunity:

Here is a company that just had a stellar quarterly earnings report, gave unchanged guidance for the upcoming year (which was still very rosy guidance) and gets hammered, losing nearly 50% of its value. Wow.

Okay, I'm hearing that analysts were expecting the company to raise guidance for the upcoming year and were disappointed that it stayed the same? Really? Is that such bad news?

I'm thinking there is a huge bounce-back in the works for Tempur-Pedic. I think it will bounce to at least $65 per share before possibly evening out somewhat.

[Thumbs-up] to the company that is doing well and getting punished for not doing even better.

If you want market-beating returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, Tempur-Pedic may not be your top choice.

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Tempur-Pedic. 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.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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