On Mar 7, 2014,
) reached a 52-week high of $23.73 on strong fourth-quarter
fiscal 2013 results announced on Feb 11. Masco carries a Zacks
Rank #3 (Hold).
Share Price Drivers
Share price of Masco has been gaining momentum from the steady
improvement in the construction industry. Masco is thus seeing a
concomitant rise in demand and volume for its home improvement
products like Delta faucets, Behr paint and Milgard windows.
Despite missing the Zacks Consensus Estimate, Masco's
fourth-quarter earnings of 15 cents per share increased a massive
150% year over year. Strong revenues, solid margin expansion,
cost controls and better operating leverage led to the earnings
Moreover, revenues went up 9.1% year over year while beating
the Estimate despite difficult year-ago comparisons, driven by
Volumes benefited from new products/programs launches;
increased new home construction activity and improvement in
repair/remodel activity in North America; and increased outside
U.S. sales due to improvement in Europe. In fact, in the second
half of 2013, the company saw some traction in consumer spending
on large ticket home improvements after struggling in the past
Gross margins improved 100 basis points (bps) while operating
margins grew 210 bps helped by strong revenues and solid cost
controls. Both Installation and Cabinetry segments once again
recorded strong profitability in the quarter. Both the segments
returned to profitability in the second quarter of 2013 driven by
the company's strategic initiatives and gaining from the housing
recovery after the poor performance in 2012.
Overall, we are encouraged by Masco's continued focus on
product innovation and cost improvements. The company is also
divesting its less profitable and underperforming assets to focus
more on its core areas. During 2014, the company expects further
momentum in new home construction and repairs and remodel
activity in North America and international markets.
Other Stocks to Consider
Other stocks in the building/construction sector that are
doing well include
CaesarStone Sdot-Yam Ltd.
). While CaesarStone enjoys a Zacks Rank #1 (Strong Buy),
the other two carry a Zacks Rank #2 (Buy).
CAESAR STONE SD (CSTE): Free Stock Analysis
MASCO (MAS): Free Stock Analysis Report
USG CORP (USG): Free Stock Analysis Report
WOLSELEY -ADR (WOSYY): Get Free Report
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