Shares of Masco Corporation ( MAS ) reached a 52-week
high of $22.23 on Tuesday, May 14, 2013 gaining momentum from the
improving sales trends in North America as new home construction
activity recovers steadily. The closing price of the shares of this
home improvement and building products company on May 14 was
$22.17, yielding a superb year-to-date return of 30.4%.
Share Price Drivers
Though Masco's first-quarter revenues and earnings (announced on
Apr 30) missed the Zacks Consensus Estimate, both grew
year-over-year driven by strong performance in North America, the
company's turnaround efforts and profit improvement initiatives.
North American sales increased 6% year over year on the back of
increasing new home construction activity, which is driving demand
for Masco's home improvement products. Further, new product
launches also boosted sales.
Most encouragingly, the company's cabinetry business, which
until now was sluggish, achieved break-even operating profit in the
quarter with the North American cabinetry business showing profits.
Also, consolidated operating margins increased in the quarter on
the back of volume growth and cost savings from Masco's strategic
Masco undertook several strategic initiatives to strengthen its
business. The initiatives include improvement of underperforming
businesses like Installation and Cabinet; leveraging its brands,
new product introduction and product innovation, and efforts to
reduce costs and strengthen its balance sheet.
The robust quarterly results led to an upward bias in estimate
revisions. In fact, the Zacks Consensus Estimate for 2013 and 2014
increased a respective 3.0% and 2.0% to 68 cents and $1.03 per
share over the last 30 days.
Other Stocks to Consider
Other stocks in the homebuilding sector that are performing well
and deserve a mention include Ryland Group Inc. (
Meritage Homes Corporation ( MTH ) and D.R.
Horton, Inc. ( DHI ), all carrying a
Zacks Rank #1 (Strong Buy).D R HORTON INC (DHI): Free Stock Analysis
ReportMASCO (MAS): Free Stock Analysis ReportMERITAGE HOMES (MTH): Free Stock Analysis
ReportRYLAND GRP INC (RYL): Free Stock Analysis
ReportTo read this article on Zacks.com click here.Zacks Investment