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Culp Poised To Rebound On Cost Cutting & Debt Reduction

In early September, Culp Inc. (CFI) reported results for its fiscal 1Q09, which included lower net sales of $59.3M compared to $65.2M in the year-ago period, but still managed a profit per diluted share of $0.06 ($781K) versus $0.07 ($851K) in the year-ago period. Excluding restructuring charges, 1Q09 profits were $1M or $0.08 versus $1.5M or $0.12 in the year-ago period. In mid-August, Culp acquired the knitted mattress fabrics operation of Bodet & Horst to provide the Company with improved supply logistic

1) Hurricane Gustav wavered, so crude fell $6 and natural gas plunged a mind blowing 10%, or 80 cents. Other commodities collapsed across the board and stocks took off.

2) Q2 GDP came in at a blistering 3.2%, almost double some forecasts. While the stimulus checks provided a minor assist, it was really all about the enormous boost being given the economy by international trade. Unfortunately, if you don’t sell routers in India, ship food or commodities to China, or sell crude products anywhere you were toast. When this market does recover there is no doubt it will be lead by companies with

XHB is an exchange traded fund loaded with home builders and such housing related companies as Lowes (LOW) and Home Depot (HD).<!--more--> I believe that the home builders have generally seen their lows for the next year or so, even though a few builders may be vulnerable to bankruptcy. This makes the diversified ETF a safer vehicle.

Using XHB as our ETF proxy for homebuilders, the index bottomed out early this year at 15.22. XHB now trades around $23. With market interest rates very low investors are looking for relatively safe returns on their investments that exceed 2 or 3 %. I like th

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