We expect the premier supplier of building materials,
) to beat expectations when it reports fourth quarter 2012
results on Feb 8.
Why a Likely Positive Surprise?
Our proven model shows that Louisiana-Pacific is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), is at +5.00%. This is very meaningful and a leading indicator
of a likely positive earnings surprise for shares.
Zacks Rank #1 (Strong Buy):
Louisiana-Pacific currently carries a Zacks Rank # 1(Buy). Note
that stocks with a Zacks Rank #1, #2 and #3 have a significantly
higher chance of beating earnings. The sell rated stocks (#4 and
#5) should never be considered going into an earnings
The combination of Louisiana-Pacific's Zacks Rank #1 (Strong Buy)
and an ESP of +5.00% makes us very confident in looking for a
positive earnings beat on Feb 8.
What is Driving the Better Than Expected
With the improving housing market, there is an increase in new
home construction activities, which is boosting demand for
Louisiana-Pacific's products. The company is witnessing volume
and pricing increases in the Oriental Strand Board and Siding
segments, which resulted in double digit sales rise in both the
segments in the third quarter of 2012.
The company's OSB segment is expected to benefit from the
acquisition of the remaining shares in the Peace Valley joint
venture from its partner, Canfor Corporation as it will
strengthen production capacity of the segment.
Louisiana-Pacific is optimistic that further increase in housing
construction activity and overall price appreciation will boost
top line growth of the company in the immediate quarters.
Estimates are mostly seeing an upward trend ahead of the fourth
Other Stocks to Consider
Louisiana-Pacific is not the only housing company looking up
this earnings season. Other stocks that deserve a mention
), Earnings ESP of +4.35% and Zacks Rank #3 (Hold)
), Earnings ESP of +10.53% and Zacks Rank #2 (Buy).
(NVR), Earnings ESP of +10.12% and Zacks Rank #1 (Strong
LOUISIANA PAC (LPX): Free Stock Analysis
NVR INC (NVR): Free Stock Analysis Report
POTLATCH CORP (PCH): Free Stock Analysis
WEYERHAEUSER CO (WY): Free Stock Analysis
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