Shares of office furniture maker Steelcase (SCS) have been on a tear over the past year with the stock up 70% over the last twelve months. The share price is now trading above its 2007-08 highs, just before the Great Recession. Its business has come back, but revenues and margins are still below 2007-08 levels. It got us thinking; is the current market price is justified?
Steelcase is at near decade highs, but its return on invested capital is down to 2.7% (compared to the 9.2% in fiscal '08), return on assets are down to 2.4% (5.89% in '08) and the net margin is a slim 1.36% (3.89% in '08).
And although the industry has seen some...
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