Validea’s pick of the week provides a detailed report on a company that scores well in the stock-screening service’s model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.
California-based Williams-Sonoma Inc. sells culinary supplies and home furnishings through its Williams-Sonoma, Pottery Barn, Pottery Barn Kids, PBteen, West Elm, Rejuvenation and Mark and Graham stores. It has a market cap of $6.6-billion (U.S.)
Williams-Sonoma has grown EPS at a 38-per-cent clip over the long term (using avg of 3, 4 & 5 yr EPS growth rates), part of why it gets strong interest from Peter Lynch model. The Lynch model also likes its 0.62 P/E-to-growth ratio.
The company gas $280-million in annual earnings versus just $2-million long-term debt, which the Warren Buffett model likes.
It has increased EPS in each year of past half decade, helping it earn strong interest from the James O'Shaughnessy growth approach. The O'Shaughnessy model also likes its combination of a good relative strength (66) and reasonable price/sales ratio (1.47) .
The Kenneth Fisher model has some interest thanks to reasonable price/sales ratio, positive free cash flow ($1.50 per share), and 0.3% debt/equity ratio.
Willians Sonoma also has a solid 23-per-cent return on equity.
John Reese is long WSM.
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