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Here's Why Gibraltar Industries (ROCK) Stock is a Solid Pick


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The upswing in the construction sector through 2017 is not displaying any signals of fizzing out anytime soon. Factors like rise in U.S. housing starts & building permits, impressive labor market scenario, upbeat wage rates, modest inflation and Trump's long-awaited $1.5-trillion infrastructure plan are all key drivers behind this upside.

The Zacks Construction sector flaunts a Zacks Rank #1, at present (out of 16 sectors). Hence, top-performing stocks from this sector will make valuable additions to any portfolio.

Among the numerous potential gainers, adding Gibraltar Industries, Inc. ROCK to your portfolio will be a promising investment move at the moment.

Over the last three months, Gibraltar Industries' shares have rallied 11.8%, outperforming 3.8% growth recorded by the industry .



Notably, the attractiveness of this stock as a current investment choice is further accentuated by its favorable VGM Score   B.

Why to Grab the Stock?

Exclusive Business Strategy: Gibraltar Industries intends to boost its near-term revenues and profitability on the back the company's four-pillar value creation strategy. Under this, it has been strengthening its competency on the back of well-planned acquisitions, stronger innovation, greater operational efficacy and calculated portfolio management moves. Three years post implementation of this transformational strategy, Gibraltar Industries has boosted its return on invested capital from 3.9% to 12.6%.

The company is currently improving its operational efficacy by lowering complexity, simplifying product offerings through 80/20 initiatives and adjusting costs. In 2018, the company intends to improve its operating characteristics by implementing certain market rate of demand replenishment and in-lining projects.

Under the portfolio management pillar, Gibraltar Industries allocates its resources and leadership time to businesses enjoying maximum growth potential.

Under the acquisition pillar, the company's current target markets for buyouts are residential building products, post & parcel solutions, renewable energy and conservation, perimeter security and infrastructure.

As per the innovation pillar, Gibraltar Industries is focused on patenting the products that are developed through acquired product lines or internally within business. In 2017, roughly 7% of the company's total revenues were generated from sales of innovative products, up from 4% secured in 2014.

Top-Line Prospects: Gibraltar Industries reported better-than-expected revenues in fourth-quarter 2017, primarily on the back of improved Residential Products and Renewable Energy and Conservation segments' sales. We notice that demand for the company's centralized mail system solutions, building products and electronic package lockers has been improving over the last few quarters. Notably, the company believes the Package Concierge buyout (February 2017) will fortify its Residential business over the long run. On the other hand, elevated demand for solar tracking solutions will likely bolster near-term revenues of the company's Renewable Energy and Conservation business.

Bottom-Line Prospects: Gibraltar Industries reported better-than-expected earnings in the recently-reported quarter, driven by higher volumes and lowered corporate expenses incurred due to lower adjustable compensation 80/20 simplification initiatives. Moreover, the company secured a benefit of 39 cents per share from the corporate tax adjustment. Gibraltar Industries intends to report improved earnings and cash flows backed by the U.S. Tax Cuts and Job Act.

Upward Estimate Revisions: Over the past seven days, the Zacks Consensus Estimate for Gibraltar Industries moved 5.6% upward to $1.89 for 2018.

The positive earnings estimate revision indicates upbeat market sentiment and substantiates the Zacks Rank of 2 for the stock.

Other Key Picks

Some other top-ranked stocks in the same space are listed below:

Continental Building Products, Inc. CBPX sports a Zacks Rank of 1 (Strong Buy). The company pulled off an average positive earnings surprise of 14.61% over the last four quarters. You can see the complete list of today's Zacks #1 Rank stocks here .

Patrick Industries, Inc. PATK flaunts a Zacks Rank of 1. The company generated an average positive earnings surprise of 18.66% in the preceding four quarters.

Quanex Building Products Corporation NX , another Zacks Rank #1 company, recorded an average positive earnings surprise of 29.94% during the same time frame.

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Continental Building Products, Inc. (CBPX): Free Stock Analysis Report

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Patrick Industries, Inc. (PATK): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: NX , CBPX , ROCK , PATK


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