Sleep Number (SNBR) is a great consumer discretionary brand famous for their high end beds that have comfort controls so each person in the bed can get their best night's sleep, Steve Reitmeister, editor of Reitmeister Total Return.
And yes, I am not just an investor — but also a delighted customer who recently bought a second bed from them and could not be happier.
On the investment front, I love our timing into the shares. Their last earnings report was a miss only because of supply chain issues. Because of that they were extremely clear that demand is very high and thus increasing earning estimates for the rest of the year.
This should have led to shares on the rise. Yet, often investors don't read the fine print. Some just saw an earnings miss and hit the sell button. This allows us to buy shares worth $130-140 for only $100. Beyond the growth and value story SNBR also impresses on the POWR Ratings front.
First and foremost, this is an A rated industry (Home Improvement & Goods). Which means that the consumer trends are very favorable lifting the prospects of all companies in this group.
On top of that SNBR scores very well for Value at B and, most importantly, an A for Quality. As you have heard me say before, the Quality rating is about all the fundamental metrics of management effectiveness.
In fact, it houses the most important elements in the POWR Rating. So this A rating provides very strong foreshadowing for the future potential of shares. Indeed, I think we will sleep well at night with this stellar growth and value play now in the portfolio.
