On Jun 20, 2014, we issued an updated research report on
Gibraltar Industries Inc.
). The company has been growing on the back of acquisitions. In Sep
2013, Gibraltar Industries acquired a product line which has been
contributing to the quarterly results since then. It is keen on
further acquisitions which can yield higher returns.
We also expect higher revenues based on the company's
initiatives to strengthen its organic growth. Gibraltar Industries
intends to reinvest its huge cash balance in business for achieving
higher organic growth. Further, in the second quarter of 2014, the
company shut down a plant and is in the process of consolidating
two additional facilities, which are expected to reduce expenses by
$1.5 million annually.
Gibraltar Industries anticipates a rise in sales of Residential
Products segment. A 20% year over year hike in sales is expected
from growth in unit volume along with gains in postal products. The
company is also set to benefit from the rise in residential repair
and remodeling activities.
However, Gibraltar Industries is exposed to customer
concentration risks as it derives a large portion of its sales from
only a handful of customers. Furthermore, the company does not have
long-term contracts with its clients. This can lead to severe loss
in case of possible termination of the purchase contracts.
With a current market capitalization of $511.8 million,
Gibraltar Industries sports a Zacks Rank #1 (Strong Buy). Other
stocks worth a look in the industry include
Simpson Manufacturing Co., Inc.
James Hardie Industries plc
The New Home Company LLC
). While Simpson Manufacturing carries the same Zacks Rank as
Gibraltar Industries, James Hardie and The New Home Company hold a
Zacks Rank #2 (Buy).
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GIBRALTAR INDUS (ROCK): Free Stock Analysis
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