Furnishing and appliance stocks continue to benefit from sustained levels of home improvement spending driven by the pandemic and housing boom. Despite life slowly returning to normal as the nation's vaccination coverage expands, many consumers continue to work from the home office several days a week and are preparing for the possibility of remote learning this fall. Furnishing and appliance stocks also continue to benefit from the recent housing boom as people cash in their stimulus checks to spruce up their new properties and remodeled homes.
- Furnishing and appliance stocks remain well supported from sustained levels of home improvement spending arising from the pandemic and housing boom.
- Whirlpool (WHR) shares staged an impressive breakout after tracking the 200-day simple moving average (SMA) over the past two months.
- Leggett & Platt (LEG) shares broke above a three-month downtrend line Wednesday in a move that could act as a catalyst for additional buying.
Indeed, data compiled by market research site Statista shows revenue from "furniture and home furnishing stores" reaching $127.4 billion in 2024, up from $107 billion this year. Below, we zero in on two of the largest furniture and appliance stocks in the S&P 500 and review the charts to work through several tactical trading ideas.
Whirlpool Corporation (WHR)
Michigan-based Whirlpool Corporation (WHR) manufacturers and markets home appliances through brands such as Whirlpool, KitchenAid, Maytag, Consul, and Brastemp. The company, which operates through four geographic business units, saw its bottom line more than triple from the corresponding quarter last year thanks to sustained consumer demand for its kitchen and laundry appliances and a range of cost-based pricing initiatives. Due to the strong quarter, management also raised its full-year guidance, now expecting revenue growth in the neighborhood of 16%, up from its previous forecast of 13%. As of Aug. 12, 2021, Whirlpool stock has a market value of $14.4 billion and is trading up nearly 30% on the year. Investors also receive an annual dividend of $5.60 per share.
Whirlpool shares tracked the modestly rising 200-day simple moving average (SMA) over the past two months before staging an impressive breakout above consolidation in Wednesday's session. Active traders who anticipate further upside should think about placing a take-profit order around $254—an area where sellers may come out of the woodwork near the stock's lifetime high. Protect against a sudden shift in momentum by positioning a stop order just under this week's low at $219.04.
A take-profit order is a type of limit order that specifies the exact price at which to close out an open position for a profit. If the price of the security does not reach the limit price, the take-profit order does not get filled.
Leggett & Platt, Incorporated (LEG)
Leggett & Platt, Incorporated (LEG) manufactures and sells engineered components for bedding, furniture, and flooring products. Earlier this month, the company disclosed a Q2 adjusted profit of 66 cents per share on net sales of $1.27 billion, with both figures topping Wall Street forecasts and growing 340% and 50.2% from the prior year. Moreover, the furniture component maker now expects 2021 revenues to come in between $4.9 billion and $5.1 billion, up from its earlier forecast of $4.8 billion to $5 billion. This indicates a top-line year-over-year improvement of 14% to 19%. Through Thursday's close, the stock offers investors a 3.38% dividend yield and has gained 12.21% since the beginning of the year.
The price broke out above a three-month downtrend line Wednesday in a move that could act as a catalyst for additional buying over the coming weeks. Furthermore, a recent cross of the moving average convergence divergence (MACD) line above its signal line favors the bulls. Those who buy at these levels should look to bank profits at key overhead resistance levels of $52.30, $55.75, and $58. Be prepared to exit the trade with a small loss if the price fails to hold above the Aug. 10 low at $47.12.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.