Zacks Investment Research upgraded
Universal Forest Products Inc.
) to a Zacks Rank #1 (Strong Buy) on My 11, 2013.
Why the Upgrade?
Universal Forest impressed all with its financial results for the
first quarter 2013 reported on Apr 17, 2013. The company rode on
the back of its strong sales performance in its five market
segments. The share price since then has increased roughly by
Net income of Universal Forest in the quarter grew 25.7% year
over year while earnings per share came in at 26 cents, up 24%
over 21 cents reported in the year-ago quarter and way above the
Zacks Consensus Estimate of one cent.
Net sales grew 21.3% year over year to $554.5 million benefiting
from healthy growth in the lumber market. Talking of costs and
margins, cost of goods sold, as a percentage of revenue,
increased 140 basis points year over year while gross margin
decreased by the same magnitude and settled at 10.3%.
Management of Universal Forest looks forward to improving its
top-line growth through additions of new customers and products
to its portfolio, going forward. Also, operating margin
enhancement remains a prime area of focus for the company.
The solid financial performance induced an upward revision in the
earnings estimate for Universal Forest. The Zacks Consensus
Estimate in the last 30 days has gone up by 21.0% to $1.73 for
2013 and increased by 3.0% to $2.40 for 2014.
Also, a whopping 2,500% positive earnings surprise in the first
quarter 2013 has negated negative surprises in the last three
quarters, resulting in a positive average of 467.0%. All these
positives have raised optimism for better results ahead for
Other Stocks to Consider
Universal Forest Products Inc. manufactures, treats, distributes
and installs lumber, composite wood, plastic and other building
products. The stock currently has a market capitalization of
Other stocks to watch out for in the industry are
), holding a Zacks Rank #1 (Strong Buy) while
), each with a Zacks Rank #2 (Buy).
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