Sold BSET today at $15.30 per share and bought LZB at $39.35 a share. Didn’t want to own those two and WSM all at once. LZB is a good furniture company at a cheap price, which beats a mediocre one at a cheap price.
Including dividends, the total return on BSET was 1.71% against 12.32% for VOO with dividends. Still think BSET would beat it in the long term had I held, but I think LZB is going to beat it by more.
LZB has a reasonably good balance sheet, no long-term debt, good earnings growth over the last decade, and a good plan to continue to grow earnings - which analysts are predicting will stay flat. I think their plan is simple, straight forward, and reasonable. Return supply chain efficiencies to pre-covid levels to improve wholesale margins from the 8% range to 10%. Increase the number of company-owned stores and buy as many existing stores that aren’t company owned back as possible, as their margins run at 16.5%.
They seem to be buying back several stores per year, going from ~170 to ~180 company owned stores this year (350ish total), and they want to open 50 stores over the next several years. Given their cash on hand, this seems eminently doable and if they pull it off and the economy stays flat, their earnings go up. If the economy improves, even better.
While we’re on furniture/furnishing stocks, WSM up 59.66% since I bought it 9/5/23. If I see something great, I could consider selling this one, but I think it’s an extremely well-run business and I’m not exactly looking for reasons to exit. Earnings next month.
Bought OXY today at $57.85. Pretty simple one here. Warren Buffett/Berkshire is buying it hand over fist in the $56 to $58 range, and has also added it up to $61 maybe $62. They own ~28% of the company and are allowed to buy up to 50% of it. So my margin of safety is Warren Buffett’s buying power. Seems very unlikely this can crash below $56 when he’s got another $10 billy ready to fire into it. Also I get to buy a stock at the same time he does at the same price, hard for that not to be a +EV trade right?
On top of the obvious (it’s Occidental Petroleum, after all), they have a chemical subsidiary and they’re actually doing some cool stuff on climate change. They’re opening a direct air capture plant in 2025, they’re already selling carbon credits, and they’re going to be opening more of them after that. So I think what Buffett is seeing here is at least 7-10 more years of gas consumption before alternatives really start to take over, the possibility to continue after that due to the DAC plants, and the possibility to sell carbon credits in the future… and of course the chemical business, probably worth around 1/4 of the share price right now.