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Gibraltar Industries (ROCK) Adds SolarBOS to its Portfolio

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In a bid to strengthen its foothold in renewable energy market, Gibraltar Industries, Inc. (ROCK - Free Report) announced the acquisition of SolarBOS — a U.S.-based private firm that provides electrical balance of systems products. However, the value of the deal has been kept under wraps.

Notably, this buyout is likely to be accretive from 2019. SolarBOS has posted revenues of $13.5 million on a trailing 12-month basis. We believe the acquisition of SolarBOS will drive the company’s top line as the long-term market growth prospects of both Renewable Energy and Conservation businesses are solid. In the first six months of 2018, SolarBOS’ net sales from its Renewable Energy and Conservation segment increased 14.1% on a year-over-year basis. This upside was driven by strong demand from both domestic renewable energy and conservation markets, and continued traction of innovative products.

Furthermore, solid demand for community solar — which is the market Gibraltar serves — is quite encouraging. In fact, U.S. solar growth has remained undeterred by the solar panel tariffs.

A study by the Solar Energy Industries Association and GTM Research reveals that solar energy has become a cost-effective option for most part of the United States despite the tariffs being levied on imported PV panels, which is concerning for the industry.

Price Performance

The Zacks Rank #3 (Hold) company’s shares have gained 38.6% year to date against its industry’s decline of 10.2%. The uptrend was backed by an increased percentage of U.S. housing starts & building permits, impressive labor-market scenario, upbeat wage rates and modest inflation. Trump’s most-awaited $1.5-trillion infrastructure plan will likely demand more building and infrastructure spending in the near future, which may boost revenues and profitability of construction companies like Gibraltar.

Key Picks

Better-ranked stocks worth considering in the same space include NCI Building Systems, Inc. , Patrick Industries, Inc. (PATK - Free Report) and Continental Building Products, Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NCI Building Systems reported better-than-expected earnings in the trailing three quarters.

Patrick Industries has an impressive long-term earnings growth rate of 14.9%.

Continental Building Products earnings are likely to witnesses 50.4% growth in the current year.

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