March 20, 2006,
Lorberbaums Sell Part Of Mohawk Stake
Mohawk Industries has reported to the Securities and Exchange Commission that Aladdin Partnership, which manages investments for the Lorberbaum family, a principal shareholder of Mohawk, will sell up to 1.7 million shares of Mohawk stock over the next 18 months.
Aladdin Partners said the trading plan is part of a diversification and tax planning strategy.
Analysts Split On Bed Bath & Beyond
Two Wall Street analysts are taking widely divergent positions on home furnishings big-box player Bed Bath and Beyond. One raised her earnings estimate, while another turned bear and lowered hers.
Staking out a bullish position, Joan Storms of Wedbush Morgan Securities reiterated her 'buy' rating on the retailer's stock, and raised her earnings estimate. The analyst said the retailer's recently completed buyback of $600 million of its own shares will add about $0.02 per share to earnings during the fourth quarter and about $0.09 per share for all of 2006.
But pulling in her horns and growing a little more bearish, Adrianna Shapira of Goldman Sachs trimmed her earnings outlook slightly for the fourth quarter of 2005, to $0.65 a share from $0.66, citing a lower same-store sales forecast. The analyst said she has whittled down her same-store sales projection to a gain of 3.0% from an earlier forecast of a 3.5% increase.
Citing a monthly survey compiled by Retail Forward, the analyst said, “The data illustrates continued weak traffic trends in the home category, with only modest share gains for Bed Bath and Beyond. We also noted solid traffic at Linens 'n Things, which means less share donation to Bed Bath & Beyond.”
The Goldman Sachs analyst concluded, “While Bed Bath and Beyond remains a best-in-class operator with strong cash flow generation, its slowing growth across a tougher home spending backdrop with increased competition makes for a range-bound stock in the near-term.”
Warm Weather Heats Up Housing Starts
The warmest January on record nationwide, and a dip in mortgage interest rates, triggered a steep 14.5% surge in new home construction, the Commerce Department reported.
The January pace of starts rose to a seasonally adjusted annual rate of 2.276 million units, the highest on record since 1973. The pace was 4.0% above prior-year levels. Single-family housing starts rose 12.8% to a new record pace of 1.819 million units for the month, about 2.8% above last year's level.
“The January surge in housing starts was mainly weather-related,” said David Seiders, chief economist of the National Association of Home Builders. “Market fundamentals suggest that this pace of activity will be hard to sustain.” And Seiders said the trade group's canvass of home builders “points toward some cooling down in coming months, largely because of eroding affordability conditions.”
All four regions of the nation reported strong gains in housing starts, with the Northeast putting up the biggest increase, 21.9%.
Multi-family housing starts increased by 21.9% in January. “Our surveys show that the rental market is firming up to some degree, with declining vacancies and rising rents,” added Seiders.