Key Takeaways ENVA, SNEX, SHIP and FLXS stocks were screened for margins, EPS growth and bullish analyst sentiment.ENVA, SNEX, SHIP and FLXS have witnessed upward EPS estimate revisions recently.All picks hold high Zacks Ranks and strong VGM Scores, supporting their upside potential.Investors seek companies that consistently generate profits. One of the best metrics to measure profitability is the net profit margin. This metric highlights a company's ability to convert sales into actual profits, providing i ...

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Market Overview - A notable shift in market leadership has occurred, with major indexes remaining flat while a broader group of S&P 500 members participates in the rally, indicating a healthy consolidation among market leaders [1][2] Flexsteel Industries - Flexsteel Industries is a manufacturer and importer of residential furniture, known for durable seating products and a broad distribution network [5] - The company has streamlined operations and is benefiting from a rebound in the housing industry, ranking in the top 18% of the Zacks Industry Rank [6] - Flexsteel carries a Zacks Rank 1 (Strong Buy), with earnings estimates rising by 15.5% for the current year and 11.5% for next year [6] - Shares trade at approximately 13.6x forward earnings, aligning with the company's long-term average, allowing for potential multiple expansion [7] - The stock is forming a high-and-tight flag pattern, suggesting potential for further upside if it breaks above its recent range [8] Allegiant Air - Allegiant Air is an ultra-low-cost carrier focusing on underserved cities and popular leisure destinations, emphasizing point-to-point routes and ancillary revenue streams [10] - The airline industry ranks in the top 12% of the Zacks Industry Rank, with Allegiant benefiting from this strength, leading to a 21.3% increase in earnings estimates for the current year [11] - Shares trade at roughly 13.8x forward earnings, with projected EPS growth of 51.3% annually over the next three to five years, resulting in a PEG ratio of 0.27 [12] - The stock is also forming a high-and-tight flag pattern, indicating potential for continuation higher if breakout confirms [13] Hershey Company - Hershey is a leading consumer franchise in the U.S. confectionery market, with a strong portfolio of brands [14] - The stock has rebounded from lows, gaining momentum as capital rotates towards diversification, supported by a strong earnings beat [15] - Earnings estimates have increased by 17.4% for this year and 16.4% for next year, reflecting strengthening analyst conviction [16] - The stock is forming a high-and-tight flag formation, similar to other emerging leaders [16] Investment Considerations - Flexsteel, Allegiant, and Hershey are emerging from periods of underperformance as market leadership broadens, presenting potential investment opportunities [19] - With a resilient economic backdrop and improving earnings outlooks, these companies may offer attractive upside as the rally continues [20]

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of a trend in short-term investing, highlighting that successful entry timing is crucial for profitability [1][2]. Group 1: Trend Analysis - The trend can reverse before exiting a trade, potentially leading to short-term capital losses for investors [2]. - A predefined screening strategy, "Recent Price Strength," helps identify stocks with strong fundamentals that can maintain their upward momentum [3]. Group 2: Stock Performance - Flexsteel Industries (FLXS) has shown a solid price increase of 61.3% over the past 12 weeks, indicating strong investor interest [4]. - Over the last four weeks, FLXS has maintained a price increase of 43.4%, suggesting that the upward trend is still intact [5]. - FLXS is currently trading at 92.2% of its 52-week high-low range, indicating a potential breakout [5]. Group 3: Fundamental Strength - FLXS holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The Zacks Rank system has a strong historical performance, with Rank 1 stocks averaging a +25% annual return since 1988 [7]. - The Average Broker Recommendation for FLXS is also 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 4: Additional Opportunities - Besides FLXS, there are other stocks that meet the criteria of the "Recent Price Strength" screen, suggesting further investment opportunities [8]. - The article encourages exploring over 45 Zacks Premium Screens tailored to different investing styles for potential stock picks [8].

Core Viewpoint - Flexsteel Industries (FLXS) shows potential as a strong investment opportunity due to significant revisions in earnings estimates, indicating an improving earnings outlook [1][10]. Earnings Estimate Revisions - The current quarter's earnings estimate is $0.80 per share, reflecting a decrease of 29.2% compared to the previous year. However, there has been a 15.94% increase in the Zacks Consensus Estimate over the last 30 days, with one estimate moving higher and no negative revisions [7]. - For the full year, the earnings estimate stands at $4.09 per share, which is a decline of 1.9% from the year-ago figure. Similar to the current quarter, there has been one upward revision and no negative changes in estimates, indicating a positive trend [8]. Analyst Optimism and Stock Performance - The rising trend in earnings estimate revisions reflects growing analyst optimism regarding Flexsteel's earnings prospects, which is expected to positively influence the stock price [2]. - Flexsteel currently holds a Zacks Rank 2 (Buy), suggesting that it is well-positioned for potential outperformance compared to the S&P 500, supported by the historical performance of stocks with high Zacks rankings [9]. Recent Stock Movement - Flexsteel's stock has appreciated by 13% over the past four weeks, driven by favorable estimate revisions and positive earnings growth prospects, making it a candidate for portfolio consideration [10].

Core Viewpoint - The article emphasizes the investment philosophy focused on identifying mispriced securities through understanding the financial drivers of companies, often revealed by DCF model valuation [1]. Group 1: Investment Philosophy - The investment approach is not confined to traditional categories such as value, dividend, or growth investing, but rather considers all prospects of a stock to assess risk-to-reward [1]. Group 2: Market Focus - The investment strategy includes a major focus on small cap companies across US, Canadian, and European markets [1].

Group 1 - The investment approach focuses on long-only strategies, evaluating companies from an operational and buy-and-hold perspective rather than market-driven dynamics [1] - The emphasis is on understanding the long-term earnings potential of companies and the competitive dynamics within their industries [1] - Most recommendations will be holds, indicating that only a small fraction of companies are considered buy opportunities at any given time [1] Group 2 - Hold articles are intended to provide valuable information for future investors and introduce a level of skepticism in a generally bullish market [1]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q ______________________________________ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 2025 or Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 0-5151 ______________________________________ FLEXSTEEL INDUSTRIES, INC. (Exact Name o ...

Core Insights - Flexsteel Industries reported a strong second-quarter fiscal 2026 performance, with net sales reaching $118.2 million, a 9% increase from $108.5 million in the prior-year period, marking the ninth consecutive quarter of year-over-year sales growth [2][6][3] - The company achieved a GAAP operating income of $9.0 million, or 7.6% of sales, with adjusted operating income increasing by 35% compared to the previous year [1][6] - Management highlighted the impact of tariffs on revenue, estimating tariff-related revenue at approximately $9.5 million, and indicated potential margin dilution in the second half of the fiscal year due to higher-cost inventory [5][9] Financial Performance - Net sales for the quarter were $118.2 million, up 9% from $108.5 million in the prior-year period, driven by higher unit volume in sourced soft seating products and pricing from tariff surcharges [2][6] - GAAP operating income was reported at $9.0 million, with an adjusted operating income increase of 35% from $6.7 million in the prior-year quarter [1][6] - The company ended the quarter with $36.8 million in cash, $126 million in working capital, and no bank debt, with a sales backlog of $82.4 million [4][15][16] Market Dynamics - Management noted that the furniture market is influenced by uneven demand, shifting consumer behavior, and evolving tariff policies, which are key variables affecting performance [3][14] - The company experienced gains in soft seating products, but these were offset by a nearly 50% decline in Homestyles ready-to-assemble sales [4][12] - Flexsteel's strategic focus on large independent retailers is expected to drive growth through share gains and expanded penetration in the market [13] Operational Insights - The company emphasized structural margin gains from cost discipline and productivity improvements, with management stating that margin performance benefited from sales leverage and thoughtful product portfolio management [7][6] - New products accounted for approximately 30-40% of overall sales, with a strong pipeline expected to contribute to future growth [11][12] - Management is pursuing additional cost initiatives to offset tariff impacts and has paused forward guidance due to uncertainty around demand and tariffs [10][9]

Core Viewpoint - The company is conducting an investor call to discuss recent transactions and strategic moves, including capital rotation in Spain and asset acquisitions [1]. Group 1: Capital Rotation Strategy - The company is implementing a capital rotation strategy in Spain, highlighted by the sale of retail parks and the acquisition of a new shopping center named Bahia Sur [2]. - The acquisition of a stake in Pradera is viewed as a significant strategic move for the company [2]. Group 2: Asset Rotation in South Africa - There is ongoing asset rotation work in South Africa, which will be briefly updated during the call [2]. - A trading update covering performance in South Africa, Spain, and Portugal is expected to be released soon, with positive sentiments expressed regarding trading in these markets [3].