La-Z-Boy Inc. (LZB)

(A Top Pick April 30/14. Up 10.58%.) Bought this basically on the back of what he expected and still expects, i.e. a long term secular move in terms of the housing market and household formation. Looking at statistics, household formation in the US right now is running somewhere around $1 million a year, and the run rate of $1.5 million a year is needed to keep up with the immigration and population growth. Well-managed and produce a good product. Have done well and thinks they will do better.

A bit of a play on the household formation theme. As you have people forming households, they are buying furniture. This has been a well managed company. They are working to reinvent themselves a little. Sold their Bauhaus division and have brought Brooke Shields into their ads which he sees as an attempt to take the old man’s chair and revitalize it a little. It is certainly working. Has about a 5% free cash flow yield and earnings growth is pretty robust. Yield of 1%.