LSCO Lesco (MM)

Dutton Associates continues its coverage of LESCO Inc. (NASDAQ:LSCO) with an updated initial report. LESCO's rating is maintained at Buy with a price target of $18.00. The report by Dutton senior analyst Paul Resnik, CFA is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, Investars and other leading financial portals. LESCO, Inc. is the largest supplier to the U.S. professional lawn-care and golf-course markets. Over the past 3 1/2 years, the Company has been engaged in an ongoing restructuring as it has sought to increase profitability and put itself on a growth path. After putting new management in place in 2001/2002, LESCO commenced to discontinue low-profitability manufacturing operations, restart the expansion of its Service Center chain, cut headquarters expense and reconfigure its distribution network. As LESCO entered 2005, it indicated that it was reassessing its remaining manufacturing and distribution operations with an eye to narrowing the Company's focus to its retail assets, the Service Centers and Stores-On-Wheels. On July 26, it entered into an agreement to sell substantially all its supply chain assets. The increasing evidence that LESCO can improve profitability and achieve significant growth by directing its investments at expanding and improving its retail business forms the basis for our Buy rating for these shares. We believe starting from an EPS base of $0.90 in 2006, the Company, if it successfully executes its business plan, can grow EPS by at least 20% per year for the next five years. About Dutton Associates Dutton Associates is one of the largest independent investment research firms in the U.S. Its 27 senior analysts are primarily CFAs, and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 110 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors. Our annual research coverage, which currently costs US $35,000 prepaid, is 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $77,000 from the Company for 12 Research Reports with coverage commencing on 3/12/2003. We do not accept payment of our fees in company stock. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.