Zacks Investment Research provided a Zacks Rank #2 (Buy) to
Universal Forest Products Inc.
) on Mar 6, 2014. Going by the Zacks model, the company has
higher chances of performing better than the broader market and
is an attractive investment option for investors seeking exposure
in the building materials industry.
Why Zacks Rank #2?
Year to date, Universal Forest Products Inc. has provided a solid
return of 39.7% while its earnings are expected to grow 10.0% in
the next 5 years, much higher than 6.9% expected for the
industry. The company reported its fourth-quarter 2013 results on
Feb 12 and ever since its shares have risen 14.8%.
A brief discussion on Universal Forest Products' fourth-quarter
2013 results is provided below:
Universal Forest Products Inc. reported earnings per share of 40
cents, a remarkable improvement over the loss of 10 cents
recorded in the year-ago quarter and above the Zacks Consensus
Estimate of 18 cents. Results were driven by improvement in the
housing and construction markets, benefits from new product
introductions and strong industrial activities.
Net sales in the quarter were $525.7 million, up 11.7% year over
year due primarily to healthy performances at Universal Forest
Products' 5 market segments. Unit sales increased 5% while
selling prices were up by 7%. Gross margin improved by 280 basis
points year over year to 12.2%.
Subsequent to the earnings release, Universal Forest Products
Inc. announced two distribution agreements. The first agreement
requires the company's subsidiary, Boise Cascade Building
Materials Distribution, to distribute Latitudes Decking &
Railing products and accessories as well as Deckorators CXT
Railing Systems. The second agreement is for the distribution of
CAMO Hidden Deck Fastening System.
Strong fourth-quarter 2013 results and the above-mentioned
distribution agreements along with a positive average earnings
surprise of 661.7% make us optimistic of better results in the
quarters ahead. In the last 30 days, the Zacks Consensus Estimate
has increased by 5.8% to $3.30 for 2014 and 5.6% to $4.18 for
2015. These estimates reflect year-over-year growth of 55.7% for
2014 and 26.5% for 2015.
Other Stocks to Consider
Universal Forest Products Inc. manufactures, treats, distributes
and installs lumber, composite wood, plastic and other building
products. The company currently has a market capitalization of
$1.14 billion. Some other stocks worth considering in the
), all of which hold a Zacks Rank #2 (Buy).
POTLATCH CORP (PCH): Free Stock Analysis
UNIVL FST PRODS (UFPI): Free Stock Analysis
USG CORP (USG): Free Stock Analysis Report
WEYERHAEUSER CO (WY): Free Stock Analysis
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