Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<ul><li>Rotation into smaller-cap and value stocks continues.</li><li>The Water Tower Research Commercial/Contract Index (+1.2%) and Residential Manufacturers &amp; Suppliers Index (+2.4%) benefited, while the Home Goods Retailers Index (-2.1%) was weighed down, in part, by bankruptcy concerns for CONN.</li><li>The Mass Retailers Index (-2.4%) was affected by weakness in growth stocks, giant caps, and technology components of the market. </li></ul>

Rotation into smaller-cap and value stocks continues.The Water Tower Research Commercial/Contract Index (+1.2%) and Residential Manufacturers &amp; Suppliers Index (+2.4%) benefited, while the Home Goods Retailers Index (-2.1%) was weighed down, in part, by bankruptcy concerns for CONN.The Mass Retailers Index (-2.4%) was affected by weakness in growth stocks, giant caps, and technology components of the market. 

Furniture/Furnishings Weekly - Another Good Week for Stocks

<ul><li>Furniture and furnishings stocks were nicely higher in the week, as the market rotated from larger, growth-oriented, and AI-driven stocks to smaller-cap, value-oriented issues.</li><li>The WTR Commercial/Contract Furniture Index (+4.4%), Residential Manufacturers &amp; Suppliers Index (+8.3%), and Home Goods Retailers Index (+8.1%) all had strong showings, reflecting the gains seen in the broader Russell 2000 (+5.4%).</li><li>The Mass Retailers Index fell (-0.4%), in line with the broader moves away from large-cap, technology-oriented stocks. </li></ul>

Furniture and furnishings stocks were nicely higher in the week, as the market rotated from larger, growth-oriented, and AI-driven stocks to smaller-cap, value-oriented issues.The WTR Commercial/Contract Furniture Index (+4.4%), Residential Manufacturers &amp; Suppliers Index (+8.3%), and Home Goods Retailers Index (+8.1%) all had strong showings, reflecting the gains seen in the broader Russell 2000 (+5.4%).The Mass Retailers Index fell (-0.4%), in line with the broader moves away from large-cap, technology-oriented stocks. 

Furniture/Furnishings Weekly - July 15, 2024

<ul><li>In a holiday-shortened trading week (US Independence Day fell on a Thursday), larger-cap stocks outperformed smaller-cap stocks and the Water Tower Research Furniture/Furnishings indexes trailed the market.</li><li>For the week, the WTR Commercial/Contract Furniture Index (-1.2%), Residential Manufacturers &amp; Suppliers Index (-1.1%), and Home Goods Retailers Index (-3.1%) trailed the Mass Retailers Index (+2.2%) and the broader market indexes (-1.0% to +2.0%).</li><li>The US Federal Trade Commission (FTC) is officially seeking to prevent Tempur Sealy from acquiring Mattress Firm, citing concerns over corporate power and potential anti-competitive outcomes. </li></ul>

In a holiday-shortened trading week (US Independence Day fell on a Thursday), larger-cap stocks outperformed smaller-cap stocks and the Water Tower Research Furniture/Furnishings indexes trailed the market.For the week, the WTR Commercial/Contract Furniture Index (-1.2%), Residential Manufacturers &amp; Suppliers Index (-1.1%), and Home Goods Retailers Index (-3.1%) trailed the Mass Retailers Index (+2.2%) and the broader market indexes (-1.0% to +2.0%).The US Federal Trade Commission (FTC) is officially seeking to prevent Tempur Sealy from acquiring Mattress Firm, citing concerns over corporate power and potential anti-competitive outcomes. 

Furniture/Furnishings Weekly - Jul 8, 2024

Equity Bottom-Up

<ul>
<li>Home furnishings demand remains challenged.</li>
<li>As Culp’s FY24 drew to a close, sales declined in both of its segments (mattress fabrics -16.1% to $25.8 million and upholstery fabrics -22.6% to $23.8 million).</li>
<li>Weak housing markets (home sales are a traditional driver of furniture ‘spend’), ‘exhausted’ consumers (many had refurbished their homes during the pandemic lockdowns), weather, and economic uncertainty all played a role, with little evidence of a near-term catalyst for improvement.</li>
</ul>


Home furnishings demand remains challenged.
As Culp’s FY24 drew to a close, sales declined in both of its segments (mattress fabrics -16.1% to $25.8 million and upholstery fabrics -22.6% to $23.8 million).
Weak housing markets (home sales are a traditional driver of furniture ‘spend’), ‘exhausted’ consumers (many had refurbished their homes during the pandemic lockdowns), weather, and economic uncertainty all played a role, with little evidence of a near-term catalyst for improvement.


Culp, Inc. - FY25 to Be a Year of Transformation

<ul><li>Residential furniture stocks had a tough week over concerns about demand, though commercial furniture stocks fared better.</li><li>The Water Tower Research Commercial/Contract Furniture Index declined 0.5%, the Residential Manufacturers &amp; Suppliers Index fell 3.2%, and Home Goods Retailers declined 5.7%.</li><li>All three trailed the broader indexes (+0.2 to +0.5%) and the Mass Retailers Index (+1.7%). </li></ul>

Residential furniture stocks had a tough week over concerns about demand, though commercial furniture stocks fared better.The Water Tower Research Commercial/Contract Furniture Index declined 0.5%, the Residential Manufacturers &amp; Suppliers Index fell 3.2%, and Home Goods Retailers declined 5.7%.All three trailed the broader indexes (+0.2 to +0.5%) and the Mass Retailers Index (+1.7%). 

Furniture/Furnishings Weekly - July 1, 2024

United States

Culp, Inc. manufactures and markets upholstery fabrics and mattress tickings for use in furniture and bedding industries. The Company's fabrics are used in the production of residential and commercial furniture and bedding products, including sofas, recliners, chairs, loveseats, sectionals, sofa-beds, office seating, panel systems, and mattress sets.

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Culp Inc (CULP US)

Furniture/Furnishings Weekly - Another Good Week for Stocks

The Mass Retailers Index (-2.4%) was affected by weakness in growth stocks, giant caps, and technology components of the market.

Water Tower Research

Furniture/Furnishings Weekly - July 15, 2024

Furniture and furnishings stocks were nicely higher in the week, as the market rotated from larger, growth-oriented, and AI-driven stocks to...

Water Tower Research

Furniture/Furnishings Weekly - Jul 8, 2024

In a holiday-shortened trading week (US Independence Day fell on a Thursday), larger-cap stocks outperformed smaller-cap stocks

Water Tower Research

Culp, Inc. - FY25 to Be a Year of Transformation

As Culp’s FY24 drew to a close, sales declined in both of its segments (mattress fabrics -16.1% to $25.8 million and upholstery fabrics -22.6% to...

Water Tower Research

Furniture/Furnishings Weekly - July 1, 2024

Residential furniture stocks had a tough week over concerns about demand, though commercial furniture stocks fared better.

Water Tower Research

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52-week Range

Market Cap (USDm)

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