While many investors have ditched the home decor sector due the crippling effects of the U.S housing crisis, analysts say they’d be wise to take a second look at Bed Bath & Beyond.
Although it may suffer some near-term pain — it warned its fourth-quarter earnings may be weak earlier this month — a strong cash flow, minimal debt and friendly valuation might make it a wise long-term investment.
“Investors have such short-term perspective … When we get a little better environment, Bed Bath & Beyond is in pretty good position,” said Andy Cross, a senior analyst at The Motley Fool, an online community for investors.
Credit Suisse analyst Gary Balter went a little further with his hopeful assessment of the company’s future.
“The weakness in the macro environment should turn out to be a blessing in disguise for Bed Bath,” he wrote in a Jan. 14 research note.
“We would expect that smaller players may also not survive weakness in 2008, which is another good signal for BBBY.”
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