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Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:

A Wall-to-Wall Wonder by Sandra Ward

Summary: Carpet tile-maker Interface's (IFSIA) tile-shaped pieces can be cheaply and easily laid, modularly cleaned and replaced. Aside from commercial and high end retailers IFSIA is increasingly attracting mass market retailers like Lowe's (NYSE:LOW) and other commercial businesses like education facilities and medical centers. Shares went from $2 in 2002 to $16.30 now, but could reach $20-22 because: 1) CEO Dan Hendrix expects carpet tiles to double its 1/3 industry share by 2017. 2) Revenues should rise 10% next year, and an aggregate 25% by 2010. 3) Unprofitable lines will be sold. 3) IFSIA's paying down debt: from $500 million to $300m currently, aiming for $200m. 4) IFSIA's environmentally-conscious policies. 5) Growing European market share. 6) Current 16-18 P/E projections of $0.90-$1/share could climb to $1.25-$1.30/share or 12 P/E on profit growth. 7) Traditional competitors like Mohawk Industries (NYSE:MHK) and Shaw Industries are more exposed to slumping residential markets. But other high-end office furnishers like Herman Miller (NASDAQ:MLHR), Knoll (NYSE:KNL) and Hubbell (HUB), trade at 9 P/E to IFSIA's group-relative 8 P/E. IFSIA's estimated 2007 41% earnings growth beats the group's 23%. Barron's Bottom Line: IFSIA's primarily commercial renovations tile market should offset the residential housing's downturn. Shares could climb 25%-37.5%

IFSIA 1-yr. chart:

IFSIA Investment

Related Links: Short Plays for More Housing Market WeaknessMohawk Is Ready for a Housing Recovery - Barron'sInterface Sustainability Website