La-Z-Boy, Inc. (NYSE:LZB)

**** i want one !!!!

La-Z-Boy, Inc for a retailer in a somewhat "luxury" area in the midst of housing declines and forclosures has been doing very well. They are a poster child for revamping, getting costs under control, managing advertising, and managing inventory. Threre is little not to like here from a retail perspective, but overall there is little upside here either. La-Z-Boy, Inc continues to surprise analysts, though the bar is fairly low and store traffic increases and EPS beats slightly. This genreates a "pop" from short covering and a slow decline.

Some of these plays burn me lately and I'm starting to avoid these short term plays. In this case the market is at a transition point as we finish off the year. It wants to pop for a rally and if it does La-Z-Boy is unlikely to participate further than what it did today and should get left behind by the S&P for a small CAPS gain. If the market collapses then stocks such as La-Z-Boy Inc has a habit of getting punished more than most stocks and I should get some good retrace.

This is a nice little company, but again I don't see the upside and given the market conditions I think it's worth a retrace play. Even with improved earnings the P/E is over 20 and the margins are still thin. Cash flow still relies on nearly perfect inventory management. It may take some time to play out, I'll be in my recliner easing back if this pick survives through the New Year and reality finally hits the markets.