BOSTON (TheStreet) -- Call it mattress madness, but the stocks of companies in the sleep-products industry, comprised of manufacturers and specialty retailers of mattresses, are among the biggest gainers this year.
The four companies in this niche have share-price gains ranging from 28% to 92% this year, versus the S&P 500's 9.6%.
The chief contributors to investors' positive views are that sales will grow as consumer confidence rebounds; that people buying new homes, or just moving, will buy new mattresses for their new residence; and, in a new wrinkle, new types of mattresses that promise an enhanced quality of sleep over that from old-fashioned, box-spring mattress, are gaining in popularity.There has been particularly strong sales growth over the past quarter, according to industry trade group International Sleep Products Association, which reported that year-over-year unit sales rose 17.5% in February, 16.6% in January and 6.9% in December, after a relatively sleepy 2011 performance. The new-home/new-mattress link is such a big sales driver for the industry that Goldman Sachs (GS) classifies mattress-makers as part of the building products industry. 8 Fertilizer Stocks Primed for Growth Housing starts and building permits for March are due today. As for the appeal of new types of mattresses in lieu of box-spring ones, a new-found view on the importance of sleep in aiding health is building, especially among well-heeled baby boomers. As a result, more people are springing for $8,000-plus all-inclusive "sleep systems" as they promise a more comfortable night's sleep. Tempur-Pedic International (TPX), for example, which has some of the highest-priced sleep systems, reported its sales increased 28% to $1.4 billion in 2011. Industry representatives say mattresses should be considered "investments" since an individual sleeps fully a third of his life and a quality mattress should last eight to 10 years. Mattresses with a new approach to catching quality Zs don't rely on springs for support, and they have proved especially attractive to buyers. They include Tempur-Pedic's viscoelastic memory foam mattress and Select Comforts' (SCSS) air-chamber mattresses. The latter come with remote controls allowing bed mates to dial in the firmness they want on their own side. 10 Stocks That Fidelity Funds Are Buying Goldman Sachs said in a March 30 research note that mattress sales are "healthy (with) year-over-year gains in both units and average selling price. The increase in selling price is being driven by unit-share gains for the non-inner-spring category. Pricing is likely to remain healthy as non-inner-spring unit share expands, helped by new product introductions." Serta, the second-largest mattress-maker, and Simmons, another big player, are privately held. Here are four stocks of mattress makers in inverse order of their share-price gains this year:
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