CHICAGO, Oct. 30, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the HNI Corp. (NYSE:HNI-Free Report), Knoll, Inc. (NYSE:KNL-Free Report) and Herman Miller Inc. (Nasdaq:MLHR-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday's Analyst Blog:
3 Office Furniture Stocks to Buy Now
Experts from the office furniture sector are predicting that 2014 will be a good year for the industry. Many of them are of the view that production and sales of the sector could be more promising than figures recorded in the last 10 years. Fierce competition from furniture makers in China has grievously impacted the industry in the U.S. But it seems the industry is fighting back and regaining its lost ground.
Bright Prospects
A survey conducted by Michael A. Dunlap & Associates (MADA) predicts a significant increase in the office furniture market. According to Michael Dunlap, MADA was "confident that the industry is still on course to achieve its best year in the more than a decade."
The July 2014 MADA/OFI Trends survey solicited the opinion of 750 executives and individuals. This included companies from across the world with sales between $10 million to those exceeding $1 billion.
The Business & International Furniture Manufacturers Association (BIFMA) has also indicated that 2014 will be a good year for the U.S. office furniture sector. In June, the BIFMA predicted that the sector would produce $9.8 billion worth of products. This is 4.8% higher than 2013 numbers. Industry watchers believe that the forecasts for the fourth quarter of 2014 will set the pace for better prospects in 2015.
Office Properties Purchases Increase
Meanwhile, sales of commercial property in the U.S. are expected to amount to $415.1 billion over four quarters ending with 2014's third quarter. This is 8% higher than the previous four quarters taken together. This was revealed by comparable sales transaction data from CoStar.
Additionally, sales of office property are higher than apartment investment volume in the third quarter year to date as well as for year ending Sep 30, 2014. Office sales increased 19% to $125 billion over the four quarters ending Sep 30.
Analysts believe that this is the best year for office properties since the recession receded. According to CoStar Portfolio Strategy, office net absorption increased to 23.1 million square feet in the third quarter and more than 77 million square feet over the last one year. These trends indicate that the demand for office furniture will continue to grow in the days ahead.
Our Choices
Below we present three stocks which will gain from these trends, each of which also has a good Zacks Rank.
HNI Corp. (NYSE:HNI-Free Report) has two operating segments -- Office Furniture and Hearth Products. The company sells a wide range of office furniture to wholesalers, dealers, individual customers, office product distributors and governments. Office furniture is manufactured in Georgia, Alabama, Indiana, Illinois, Minnesota, Iowa, North Carolina, New York, Texas and China.
HNI holds a Zacks Rank #1 (Strong Buy) and has expected earnings growth of 37.8%. The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 22.45.
Knoll, Inc. (NYSE:KNL-Free Report) designs and manufactures workplace furnishings, fine leathers and textiles. Knoll's office segment offers seating, storage, desks, tables and KnollExtra ergonomic accessories. International sales of Knoll's North America Office products are also conducted through this segment. The company completed its purchase of Holly Hunt Enterprises, Inc. in February this year.
Apart from a Zacks Rank #2 (Buy), the company has expected earnings growth of 54.4%. It has a P/E (F1) of 18.61x.
Herman Miller Inc. (Nasdaq:MLHR-Free Report) is a designer, manufacturer and distributor of interior furnishings to be used in offices, schools, hospitals and residences. The company has three operational segments. These are the North American furniture solutions segment, ELA furniture solutions and the specialty and consumer segment.
Herman Miller holds a Zacks Rank #2 (Buy) and has expected earnings growth of 15.2%. It has a P/E (F1) of 16.49x.
An improving employment scenario and a rebound in economic growth have led to an increase in commercial activity. In such an environment, prospects for the U.S. office furniture sector will continue to improve. This is why these stocks would make good additions to your portfolio.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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