Topic: Growth Stocks

Stock Pickers Digest Hotline – Friday, June 8, 2012

Article Excerpt

TEMPUR-PEDIC, $25.54, symbol TPX on New York, has cut its revenue and earnings forecasts for this year. That caused the stock to fall almost 42% this week. The company manufactures and distributes therapeutic mattresses and pillows made from its Tempur material. Tempur-Pedic now expects to report 2012 earnings of $2.70 a share on revenue of $1.43 billion. That’s down from its previous forecast of $3.80 to $3.95 a share in earnings on $1.6 billion to $1.65 billion of revenue. The consensus estimate was for full-year earnings of $3.93 a share on revenue of $1.64 billion. The company cut its forecast because its competitors have introduced many new products and supported them with aggressive promotions. For example, Simmons Bedding Co. and Serta Inc. have both successfully launched memory-foam mattresses that directly compete with Tempur-Pedic’s products. Sealy Corp. also aims to increase its share of this market. Tempur-Pedic’s long-term prospects are sound. And with the share price drop, the stock now trades at a low 9.5…