This glass manufacturer beat earnings forecasts by $0.12 in the last quarter. The company is expected to grow by 32% this quarter, 25% next quarter and 27% next year.
Apogee Enterprises (APOG)
From Upside
Apogee Enterprises (APOG) offers an attractive play on the growing construction market. Its glass unit manufactures custom window and wall systems comprising the outside skin of commercial and residential buildings. The company also sells architectural framing structures and specialty glass products for fine art applications.
About 94% of annual sales are in the U.S., with the remainder in Brazil and Canada. Key growth drivers include government mandates for better energy efficiency, improved hotel occupancy rates, lower office vacancies, and improved retrofit activity. Apogee earns a Quadrix® Overall score of 98, versus an average of 76 for the 36 stocks in its industry group.
Apogee delivered strong May-quarter results. Per-share earnings surged 48%, as gross profit margin improved to 26% from 23.2% a year earlier. Revenue rose 3%. The order backlog increased 8% to $510 million. For fiscal 2017 ending February, management raised its per-share profit outlook to $2.70 to $2.85, up from a prior range of $2.65 to $2.80. The midpoint of $2.77 implies 25% growth. Apogee shares trade at 19 times trailing earnings, 18% below their 10-year average and 23% below the median for building-products stocks in the S&P 1500 Index.
Apogee is being initiated as a Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, August 2016