Is Tempur Sealy (TPX) Setting Up for a Big Move?

Tempur Sealy International Inc. (TPX) is one of the world’s largest bedding providers. The company develops and distributes bedding products globally through its North America and international segments… 

Tempur Sealy International Inc. (TPX) had a strong first quarter as global net sales were up 27% year-over-year. These results were driven by industry strength and successful company initiatives. They would have been even stronger if not for an industry wide supply chain shortage in Innerspring and chemicals. But the Innerspring shortage is over and management expects more growth going forward.

TPX has a current ratio of 1.4 which indicates it has more than enough liquidity to handle short-term obligations. The company also has a sky-high return on equity of 132.3% which means that management is extremely efficient. Over the past five years, earnings have grown an average of 41%. Analysts expect earnings to soar 229.4% in the current quarter. 

The stock appears undervalued with a forward P/E ratio of 13.85. The stock has been in an uptrend for most of the past year leading to a Momentum Grade of B in our POWR Ratings system. But performance has been mixed over the past couple of months as shown in the chart below.

Take a look at the 1-year chart of TPX below with added notations…

See chart and continue reading at