Simpson Manufacturing Upgraded to Buy - Analyst Blog
April 09 2014 - 9:00AM
Zacks
Zacks Investment Research upgraded
Simpson Manufacturing Co., Inc. (SSD), the leading
manufacturer of wood construction products, to a Zacks Rank #2
(Buy) from a Zacks Rank #3 (Hold) on Apr 9, 2014.
Why the Upgrade?
Simpson Manufacturing reported upbeat third-quarter 2013 earnings
on Feb 6. Results improved 33% to 16 cents per share from 12 cents
in the year-earlier quarter. Earnings were ahead of the Zacks
Consensus Estimate of 12 cents. A positive earnings surprise of 33%
was also recorded. Simpson Manufacturing has delivered 3 positive
earnings surprises in the past 4 quarters, with an average of
5.99%.
Total revenue increased 10.8% to $195.9 million, primarily
attributable to improved sales in Asia Pacific and North America.
North American sales benefited from improved economic conditions,
including an increase in housing starts compared with the
prior-year quarter. Excluding the effect of the liquidation of
heavy-duty mechanical anchor inventory, sales in Europe increased
5.2%, driven by increased sales volumes.
For fiscal 2014, Simpson expects its gross margin to be between 44%
and 45%. Effective 2014, tax rate will be between 37% and 39%.
Simpson Manufacturing will continue to benefit from increased
housing starts in North America. The company will profit from its
strategic initiatives, which include an expanded offering of
concrete construction products, specialty chemicals and wood
construction products, particularly truss plate and software
offerings. To support these initiatives, the company expects to
hire additional personnel and provide additional resources in
2014.
Other Stocks to Consider
Other players in the Building & Construction – Miscellaneous
space which look attractive at current levels include
Gibraltar Industries, Inc. (ROCK), United
Rentals, Inc. (URI) and Lincoln Electric Holdings
Inc. (LECO), all of which hold a Zacks Rank #2.
LINCOLN ELECTRC (LECO): Free Stock Analysis Report
GIBRALTAR INDUS (ROCK): Free Stock Analysis Report
SIMPSON MFG INC (SSD): Free Stock Analysis Report
UTD RENTALS INC (URI): Free Stock Analysis Report
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