It’s finally that time of year again where I go through 200 companies that made it to Forbes 200 Best Small Companies list.

There has been a big shuffle this year with 71 companies from last year falling out of the list. The requirement is that the company have annual revenue between $5 million and $750 million, be publicly traded for at least a year and have a stock price no lower than $5.

Q4 2008 Earnings Call

March 11, 2009, 10:00 am ET

Lumber Liquidators (LL) - $10.11 on NYSE on January 9, 2009
52 week price range: $18.14 – 5.68
Diluted shares: 27.3 million
Market cap: $276 million
Net debt: $(25 million) – The company is debt free with surplus cash.
Enterprise value: $251 million

The company has a December 31 fiscal year end.

My estimate of fair value based on a DCF model: $15.00 per share

Q3 20 Earnings Call

November 6, 3008 10:00 am ET

Bullish Calls:

AT&T (T) -- “I can’t turn my back on AT&T when it’s just 50 cents from its low, especially since it has great growth and a nice dividend.”

It has been a very interesting week for the portfolio thus far, with several very large movers (in both directions). so I thought I would highlight a couple of my thoughts:

Allied Defense Group (ADG): It has been one fantastic week for this stock as it has climbed 33% thus far for the week with the only news being a recommendation by the portfolio manager of the Aegis Value Fund on CNBC. Of course, this was one of the more beaten down stocks over the past few months and so long as the company can turn their record backlog which is multiples of the current market capitalization into real revenue and profits (which we hopefully will see more indications of in the next quarterly report out next week) then the stock is still very inexpensive at current levels in the mid $6 range.

Q2 2008 Earnings Call

August 6, 2008 10:00 am ET

In recent months we have seen soaring fuel and food prices, declining home prices and home equity, a fairly high increase in the unemployment rate and an economy which has slowed considerably from its levels just a few months earlier. Yet at the same time, we are seeing the consumer holding up better than many folks had anticipated. So where are people spending money?

Obviously, some of this is due to an increase in gasoline purchases, but we also see some strength out of select retailers on the very high end where a falling dollar has made US goods less expensive for foreign tourists, and then we see relatively healthy growth out of some of the so-called trade down retailers who benefit from consumers looking for better bargains. Some of these trade down retailers such as Wal-Mart (WMT) or Big Lots (BIG) along with the wholesale stores (BJ's, Sams Club, Caustic, etc.) and to a much lesser degree Target (TGT) are obvious beneficiaries, but so are price leaders in other area, and they may not be obvious candidates.

When a firm downgrades a stock after being one of the lead underwriters of the offering, you’re looking at about as clear a sell signal as you can find. That is what happened to Lumber Liquidators (LL) when Goldman Sachs downgraded the hardwood flooring retailer from a buy to a hold, saying that, after the stock’s recent run, LL’s share “trade at one of the highest multiples in [our] coverage universe.”

Even more disconcerting: a private equity company that invested in LL three years prior to the IPO has been selling millions of dollars worth of LL shares in the past few weeks, according to SEC filings.

The Company and Business:

Lumber Liquidators (LL) was started in 1993 with a decision by founder Tom Sullivan to sell lumber at reduced prices out of a warehouse. From those humble beginnings, Tom was able to build an inventory of very high-quality wood which could be used in hardwood and other flooring, and the first store was opened three years later. The company's roots started in Massachusetts but the company decided to move its headquarters to Virginia in order to have a much larger warehouse for the hardwood flooring.

Specialty retailers are a sub-segment of the $4 trillion retail industry in the United States. Specialty stores sell a single category of merchandise or carry a few closely related categories. Major categories of specialty retailing include electronics, home-related items, office supplies, shoes, books, toys, pet supplies, sporting goods, apparel, jewelry and others. Companies that fall into these categories include The Home Depot (HD), Best Buy (BBY), Staples (SPLS), Gap (GPS), Circuit City (CC), Bed Bath & Beyond (BBBY), Foot Locker (FL), Blockbuster (BBI), Radio Shack (RSH), PetSmart (PETM) and Tiffany & Co (TIF). In other words, these stores are different from the traditional mass, grocery and club retailer that carry a wide assortment of products and categories.

Specialty retailers are experiencing difficult times due to macroeconomic challenges. First, I will explore some of the industry trends; I will then talk about the major challenges retailers are facing; finally, I will discuss some useful strategies to employ when analyzing these companies.

Lumber Liquidators (LL) is going public this week. The Virginia based company is the largest specialty retailer of hardwood flooring in the U.S.

All quotations are from the company's most recent S-1 filing with links provided.