Steelcase (SCS): Small Cap Ready to Outperform

Steelcase (SCS) is a leader in office furniture and interior design. This may strike folks funny as the Covid movement led to many more people working at home. And thus would assume that demand for office furniture is on the decline. Yet as can clearly be seen by Steelcase’s recent earnings results...nothing could be further from the truth. 

Companies are in a state of flux over how much folks can work at home versus being in the office. And that flux = new concepts about what office workspace should look like. And that is actually increasing demand for Steelcase’s myriad of products. 

That growth is expected to continue with a 15% earnings increase projected for next year. On the other hand, with an average 27% earnings beat the past 4 quarters, that growth rate will likely end up being nicely higher. 

Where SCS shines the most is through the prism of the POWR Ratings 118 factor analysis of every stock. In this case it comes out in the top 1% of the 5,300 stocks examined by the system for likelihood of future stock price outperformance. 

What stands out the most is the lack of weakness. It scores well in all aspects from Growth to Value to Momentum as well as Sentiment and Financial Quality. These are the signs of a company likely to continue to grow and impress investors. 

Gladly the one analyst covering the stock agrees with this notion. I am referring to Reuben Garner of Benchmark in the Top 5% of all analysts pounding the table on Steelcase with $18 target. That points to shares being about 40% undervalued at this time. 

You may think that only having 1 analyst covering shares is a negative. But my nearly 20 years at Zacks, with a focus on Wall Street analysts, points to this being a positive. 

That is because an underfollowed stock that continues to display impressive fundamentals (like a string of big earnings beats) will get more analyst attention over time. Each successive new Buy rating added to a small, underfollowed company like this, will be a strong catalyst for shares to bolt higher. 

When you break it down, here is the basic equation for why Steelcase is so attractive: 

Underfollowed by Wall Street + Severely Undervalued + Stellar Fundamentals (Top 1% POWR Ratings) + 27% average earnings beat = Stock with the makings to double by the end of 2025. 

What To Do Next?

Steelcase (SCS) is just one of the 12 stellar stocks found in my Zen Investor portfolio.

Plus 2 more new picks are being added on Wednesday, October 2nd. 

To learn more about our proprietary process to find more 100%+ winners…and to get your hands on the current top 12 recommendations (and the next 2 coming soon)…then all you need to do is click the link below. 

Discover the Zen Investor portfolio > 

Wishing you a world of investment success!

Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)

Editor of the Zen Investor

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