A solid year-to-date return of 85.8%, robust second-quarter
fiscal 2013 results and rising estimates aided
American Woodmark Corporation
) to attain a Zacks #1 Rank (Strong Buy) on November 21, 2012.
This manufacturer and distributor of cabinets and vanities
outperformed the Zacks Consensus Estimates in 5 out of 8
quarters. The company has topped estimates by an average of 55.4%
over the last 8 quarters.
The Rank Drivers
Improvement in new home construction activities and the
company's sturdy financial results coupled with earnings momentum
are the rank drivers for this stock.
On November 20, American Woodmark posted second-quarter fiscal
2013 earnings of 14 cents a share. The quarterly earnings not
only surpassed the Zacks Consensus Estimate of 5 cents by 180%,
but significantly rebounded from a loss of 21 cents delivered in
the year-ago quarter. Results benefited primarily from top-line
Net sales increased 24% from the year-ago quarter to $159.8
million, driven mostly by over 40% sales growth in the new home
construction business. Total revenue also came ahead of the Zacks
Consensus Estimate of $140 million. The company distributes its
products through two sales channels: Home Center and New
Gross profit margin expanded 300 basis points to 15.5% on the
back of rise in sales volume and lower fixed overhead
Soaring Earnings Momentum
The Zacks Consensus Estimate for fiscal 2013 has moved up by
58.3% to 38 cents over the last 30 days, suggesting a
year-over-year increase of 150.3%. For fiscal 2014, the Zacks
Consensus Estimate jumped 25.6% to 98 cents over the same time
frame, representing a year-over-year surge of 155.2%.
American Woodmark currently trades at a forward P/E of 67.72x,
reflecting a 229.4% premium to the peer group average of 20.56x.
Also, on a price-to-book basis, the shares trade at 2.78x, a
substantial premium to the peer group average of 1.02x. Again,
its price-to-sales ratio of 0.67 is at a premium to the peer
group average of 0.44. Given the company's strong fundamentals,
the premium valuation is justified.
Founded in 1980 and headquartered in Winchester, Virginia,
American Woodmark Corporation manufactures and distributes
kitchen cabinets and vanities for the remodeling and new home
construction markets. The company's leading brands include
American Woodmark, Timberlake, Shenandoah Cabinetry, Potomac and
Waypoint Living Spaces. The company, which primarily competes
), has a market cap of $376.1 million.
AMER WOODMARK (AMWD): Free Stock Analysis
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