“Carpet tile manufacturer Interface grew across all major metrics over the most recent decade," Price wrote recently on Real Money. "The extent of Interface's progress, though, is masked due to the severe disruption from COVID-19-related shutdowns."
Interface posted all-time record earnings per share in 2017, 2018 and 2019. Its EPS peaked at $1.18, $1.48 and $1.58 respectively. Future prospects appeared bright. Interface changed hands as high as $26.30 pre-COVID-19.
Interface EPS in 2020 declined to just $1.14. This year figures to have hit bottom in the first quarter. The second quarter showed improvement year-over-year. That trend continued when third-quarter results were announced on Nov. 5.
This is why Price sees Interface as a good bet. He sees the business environment for Interface only getting stronger as workers return to offices and the economy picks up steam. “It is just a matter of time,” he writes, “before Interface meets, or exceeds, the old record EPS of 2018 and 2019. That is decidedly not reflected in the smattering of coverage it's been getting from analysts.”
“One of these days I'm looking for a major positive earnings surprise and a fine jump in the share price. … Now, with good visibility on higher EPS to come, it's time to plan and position yourselves for a major upturn in Interface.”
Buy some shares, sell some puts or consider doing both.”