Beacon Roofing Supply
) is a Zacks #1 Rank (Strong Buy) which should benefit from an
improving economy and higher estimates tell us this could happen.
Beacon Roofing Supply, Inc. distributes residential and
non-residential roofing materials. The company's residential
roofing products include asphalt shingles, synthetic slates and
tiles, clay and concrete tiles, slates, nail base insulation, metal
roofing, felt, wood shingles and shakes, nails and fasteners, metal
edgings and flashings, prefabricated flashings, ridges and soffit
vents, gutters and downspouts, and other accessories.
A little hit or miss on earnings
BECN is 50/50 on its last six earnings reports, with 3 positive
surprises and three earnings misses. Surprisingly, the stock has
moved 10% as result of this record only one time. We would expect
to see some larger moves on the stock given this track record.
Even more interesting is that the stock moved up by 9% following
the September 2010 release in late November. The company reported
earnings $0.04 lower than the Zacks Consensus Estimate. A miss of
9% on the bottom line somehow translated into price appreciation of
9% for the stock, an interesting move to say the least.
BECN Earnings This Week
On February 9, 2012 the company is expected to report earnings per
share of $0.29 and sales of $475 million. Those numbers are higher
than the year ago actual levels of $0.22 in earnings per share and
$405 million in sales. Given the lack of reliability of the
reports, a wait and see policy may be best.
BECN trades at both a discount to the industry for PE on a trailing
twelve month basis, but trades at a slight premium on a forward PE.
The price to book multiple of 2X is a little less than the industry
average of 2.7x. And the price to sales level of 0.6x is close, but
still below the industry average of 0.8x. A strong increase in
sales would serve to close the gap between the industry average
price to sales metric and BECN's multiple.
The six month chart for BECN shows just what an aggressive growth
investor is looking for. The stock is trading well above the 200
day moving average and has not even attempted to retrace back to
that important technical indicator. BECN is a Zacks #1 Rank (Strong
Brian Bolan is the Aggressive Growth Stock Strategist for
Zacks.com. He is also the Editor in charge of the
Run Investor service
BEACON ROOFING (
): Free Stock Analysis Report
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