Underperform/Speculative - Price 6.69 on June 18
by Morgan Keegan

Stripping out charges, Q4 EPS is in line on sales at minus 10%, versus our minus 8% estimate. Upholstery margin improvement offset significant weakness at retail. April 2009 fiscal year EPS guidance is in line with consensus, at 15 cents to 25 cents, on a 3% to 7% projected sales decline. We believe this may prove aggressive [due to] weakening trends we are seeing in our channel checks and macroeconomic data. We remain negative on the stock and the industry, given demand trends and cost pressures. Market cap: $344 million.

This furniture maker was among the most active names on the Nasdaq Tuesday.

From a recent Mad Money show:

"That's easy: sell, sell, sell. I have no furniture companies that I'd ever recommend on this show."

Known around the world for its recliners, La-Z-Boy markets furniture for every room of the house. The two-year housing slump naturally has hurt the home-furnishings industry. Still, La-Z-Boy posted a profit in its third fiscal quarter (ended Jan. 31) of $9.5 million, or 18 cents a share, on a 7.8% drop in sales to $373.1 million -- versus a year-earlier loss of $7.8 million, or 15 cents.

Nevertheless, it cut its dividend -- to four cents a share from the 12 cents it had been disbursing for the past seven quarters -- to conserve cash, grow and lighten its debt (long-term borrowings total $146.4 million). The reduction translates into an annual savings of roughly $16.5 million. La-Z-Boy, which has been curbing costs by selling noncore assets and closing underperforming stores, among other things, has $63 million in cash on its balance sheet. It's paid dividends steadily since 1963, and its stock, which was recently quoted at 9.11 (its 52-week high is 14.85), yields 1.76%.

Citi Slashes Dividend - These Stocks Could Be Next
David Peltier, portfolio manager of the TheStreet.com's Dividend Stock Adviser, explains why Citigroup's big dividend cut won't be the last and tells which stocks may be next to reduce their payout.

Click here to watch the video.

6.8%

Year TGT Price 18, pays div, Short Ratio 24, Book value 9.44
Value play (sould see Value players buy

From Barron's 4/2/07

"Former short-seller Matthew L. Feshbach is going long in La-Z-Boy as the furniture retailer embarks on a restructuring plan to beat tough economic conditions...La-Z-Boy has a great brand, good management [and] is in a difficult situation with the stock trading near its nine-year low."

"As a long-term player, Feshbach likes to pick up stocks that operate difficult businesses. "We find companies that are going through transformations run by people that we believe we are in alignment with," he says. Feshbach also likes the company's 80-year history and "strong" balance sheet."

RJ recommendation

poor mgmt

At what point does a stock become worthless

Cost Me More Money

MLF Investments reduced its holdings to 2.44 million shares (4.7%), from the 3.06 million (6%) reported on Oct. 11.

MLF Investments lowered its holdings to 2.44 million shares (4.7%), from 3.06 million (6%) reported on Oct. 11.