NEW YORK (TheStreet) -- Shares of Lumber Liquidators (LL) - Get Report fell 13.09% to $35.44 in afternoon trading today after U.S. Senator Bill Nelson (D-FL) asked three federal agencies to investigate the company following a report Sunday on '60 Minutes' that alleged that some of its wood flooring products had dangerous levels of formaldehyde, Reuters reported.

The senator reportedly sent a letter requesting the investigation to the Consumer Product Safety Commission, Centers for Disease Control and Prevention and the Federal Trade Commission to test formaldehyde levels in the company's laminate flooring materials imported from China.

The stock rebounded to close up 5% yesterday after plummeting more than 25% in a selloff on Monday following the report. 

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The original source of information that led to the news segment can be traced back to a blog post from an obscure 25-year-old short seller, according to Bloomberg.

Xuhua Zhou, a UCLA finance doctoral program dropout, started researching the Toano, VA-based flooring company about two years ago, Bloomberg noted.

After seeing a surge in the company's gross profit margin, Zhou found that it sourced some products from China, which raised his suspicions that safety might have been compromised in pursuit of lower costs, he told Bloomberg in an interview.

The Street's Jim Cramer said that the report on the Chinese goods that may or may not have been "up to snuff" was "tough enough" that it might "set back Lumber Liquidators for a very long time."

"Lumber Liquidators sourced American and sourced Chinese, but you can bet after the drubbing its company and its stock have suffered in the last week, they wish they never heard of China," Cramer said in 'Cramer: Are Chinese Vitamins Next?' on Realmoneypro.com, where you can read more about his thoughts on sourcing other products from China, namely Vitamins.

Here's a snippet of what he had to say:

"I am wondering after the scandal involving Chinese drywall that caused respiratory problems, the 2007 Mattel (MAT) - Get Report recall of almost one million toys because the Chinese used paint with lead in it, or after the Chinese pet food debacle and now the Lumber Liquidators taint, whether someone isn't about to blow the whistle on the Chinese vitamin supplements that we think are American. When they do, the first thing that will happen is you can see raised numbers at Perrigo (PRGO) - Get Report, [which makes many generic store-branded products] because its vitamin plants are in the U.S. and are fully compliant. Someone's selling Chinese vitamins on the cheap and are hoping to get away with it."

-Jim Cramer, 'Cramer: Are Chinese Vitamins Next?' originally published 3/3/2015 on Realmoneypro.com.

Separately, TheStreet Ratings team rates LUMBER LIQUIDATORS HLDGS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate LUMBER LIQUIDATORS HLDGS INC (LL) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• Despite its growing revenue, the company underperformed as compared with the industry average of 13.5%. Since the same quarter one year prior, revenues slightly increased by 4.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
• LL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.09 is very weak and demonstrates a lack of ability to pay short-term obligations.
• 39.15% is the gross profit margin for LUMBER LIQUIDATORS HLDGS INC which we consider to be strong. Regardless of LL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.91% trails the industry average.
• LUMBER LIQUIDATORS HLDGS INC's earnings per share declined by 20.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LUMBER LIQUIDATORS HLDGS INC increased its bottom line by earning $2.77 versus $1.68 in the prior year. For the next year, the market is expecting a contraction of 3.2% in earnings ($2.68 versus $2.77).
• You can view the full analysis from the report here: LL Ratings Report

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