Nova LifeStyle: An Under-Followed Furniture Favorite

09/27/2018 5:00 am EST

Focus: CONSUMER

Bill Mathews

Editor & Founder, The Cheap Investor

Nova LifeStyle (NVFY) is a great example of a little-known company that is growing its revenues and earnings, explains small cap expert Bill Mathews, editor of The Cheap Investor.

Nova LifeStyle is a fast growing, innovative designer and distributor of modern LifeStyle furniture; primarily sofas, dining rooms, cabinets, office furniture and related components, bedrooms, and various accessories in matching collections.

Nova's products are made in the U.S., Europe, and Asia and include LifeStyle brands such as Diamond Sofa, Nova QwiK, and Bright Swallow International.

Nova's products feature urban contemporary styles that integrate comfort and functionality, incorporating upscale luxury designs appeals to middle and upper middle-income consumers in the U.S., China, Europe, and elsewhere in the world.

The Company has a decent balance sheet with $7.8 million ($0.28 per share) in cash, a book value of $2.55 per share and $7.3 million in debt. Insiders own about 56% of the 28 million shares outstanding, and institutions own 4% of the float.

We recommended Nova LifeStyle twice and it’s been a very profitable investment for our subscribers. Our first buy was in the July 2015 issue at $2.14, and it moved up to a high of $5.15 or +141%.

The price fell back to $1.74, where we recommended it again in the December 2017 issue. Since then the stock hit a high of $3.00 or +72%. Now that the stock has fallen below $1.70, we are recommending Nova LifeStyle again.

For the second quarter 2018, net income increased 150%, and revenue increased 24%. For the six months in 2018, net income turned around from a loss to a profit, and revenues increased by 23.5%. The stock is volatile, giving investors another opportunity to purchase shares at an attractive level.

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