"It's shocking how well they are doing in this economic environment," Hodges said, because the mattresses sell for $3,000 to $5,000. "They're using social media to convince people (that the price is worth it) and it's worked out extremely well."It's a product that lasts and has very high customer-satisfaction levels. And now they're getting bigger internationally, which is a new growth factor. "Our take is that when housing comes back, they will do extremely well," said Hodges. Shares are up 58% this year and 135% over the past 12 months, giving the company a market value of $4.2 billion.
A.T. Cross (ATX - Get Report) is best known as a 100-year-old maker of high-end ink pens, but the company has been restructured with that part of the business now being done in China. "It's a company we've followed forever" and now it has a new product line: "sunglasses," said Hodges. "This is a tiny value company with a new growth element." It bought the Costa Del Mar brand of sunglasses in April 2003. The company makes polarized sunglasses for use in sports such as fishing, sailing and surfing. The Costa Del Mar brand is popular on college campuses, particularly in the South, and that popularity is spreading, Hodges said. A pair costs anywhere from $90 to $300. "And they're taking market share" from the likes of the popular Oakley brand, said Hodges. It also has a smaller line of sunglasses called Native, which has just been introduced and doesn't have much traction yet. A.T. Cross shares are up 5.5% this year, 89% over the past 12 months, and they have an average annual return of 10% over the past five years. The company has a market value of a mere $125 million.