Beacon Roofing Supply (BECN - Analyst Report)
is a Zacks #1 Rank (Strong Buy) which should benefit from an
improving economy and higher estimates tell us this could
Beacon Roofing Supply, Inc. distributes residential and
non-residential roofing materials. The company's
residential roofing products include asphalt shingles,
synthetic slates and tiles, clay and concrete tiles,
slates, nail base insulation, metal roofing, felt, wood
shingles and shakes, nails and fasteners, metal edgings and
flashings, prefabricated flashings, ridges and soffit
vents, gutters and downspouts, and other accessories.
A little hit or miss on earnings
BECN is 50/50 on its last six earnings reports, with 3
positive surprises and three earnings misses.
Surprisingly, the stock has moved 10% as result of this
record only one time. We would expect to see some larger
moves on the stock given this track record.
Even more interesting is that the stock moved up by 9%
following the September 2010 release in late November.
The company reported earnings $0.04 lower than the Zacks
Consensus Estimate. A miss of 9% on the bottom line
somehow translated into price appreciation of 9% for the
stock, an interesting move to say the least.
BECN Earnings This Week
On February 9, 2012 the company is expected to report
earnings per share of $0.29 and sales of $475 million.
Those numbers are higher than the year ago actual levels of
$0.22 in earnings per share and $405 million in sales.
Given the lack of reliability of the reports, a wait and
see policy may be best.
BECN trades at both a discount to the industry for PE on a
trailing twelve month basis, but trades at a slight premium
on a forward PE. The price to book multiple of 2X is a
little less than the industry average of 2.7x. And the
price to sales level of 0.6x is close, but still below the
industry average of 0.8x. A strong increase in sales would
serve to close the gap between the industry average price to
sales metric and BECN's multiple.
The six month chart for BECN shows just what an aggressive
growth investor is looking for. The stock is trading well
above the 200 day moving average and has not even attempted
to retrace back to that important technical indicator. BECN
is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist
Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor