LL - Don't Count on a Lumber Liquidators Comeback
Lumber Liquidators (NYSE: LL) shares are soaring suddenly after a blog post on Reddit gave a bullish argument for the stock and encouraged other traders to snatch up shares and calls ahead of the Feb. 25 earnings report.
Shares of the wood flooring specialist rose as much as 30% on Thursday, closing the day up 18.6%. The stock was poised for more gains on Friday, surging as much as 22% in morning trading before cooling off.
The blog post from a trader argued that a tight housing supply and low interest rates should give the stock a tailwind and pointed to home construction indexes such as iShares U.S. Construction ETF (NYSEMKT: ITB) and SPDR S&P Homebuilders ETF (NYSEMKT: XHB), which are trading at all-time highs, while Lumber Liquidators' shares were trading in the single-digits. The stock plunged after a 60 Minutes report in 2015 found that some of the company's flooring products contained illegal levels of formaldehyde, and it has not recovered since then. At one point, the stock was trading near $120; today, it's near $10.