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Beacon Roofing Supply (BECN - Free Report) , a Zacks Rank #1 (Strong Buy), is engaged in the distribution of roofing materials in the United States and Canada. BECN shares are widely outperforming the market this year and appear poised to continue that trend in 2024. The stock looks primed to break out of a multi-month consolidation pattern, touching a new 52-week high during yesterday’s trading session. Renewed volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.
BECN is part of the Zacks Building Products – Retail industry group, which currently ranks in the top 37% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Beacon Roofing Supply provides residential and non-residential roofing materials and building products to contractors, homebuilders, building owners, lumberyards, and retailers. The company offers a variety of solutions such as pitched and low-slope roofing, gutters and siding, HVAC, and commercial insulation products. BECN also provides building materials such as lumber and composite, plywood, decking and railing, skylights, and windows.
In addition, Beacon Roofing supplies waterproofing products and vapor barriers, as well as tools and equipment such as ladders, power tools, nails, screws, drill bits, and saw blades. The company was founded in 1928 and is headquartered in Herndon, Virginia.
Earnings Trends and Future Estimates
The roofing supplier has put together an impressive earnings history, surpassing earnings estimates in three of the last four quarters. Back in November, the company reported third-quarter earnings of $2.85/share, a 12.2% surprise over the $2.54/share consensus estimate. Beacon Roofing Supply has delivered a trailing four-quarter average earnings surprise of 11.1%.
BECN shares have received a boost as analysts covering the company have been increasing their Q4 earnings estimates lately. For the fourth quarter, earnings estimates have risen 16.08% in the past 60 days. The Q4 Zacks Consensus EPS Estimate now stands at $1.66/share, reflecting a potential growth rate of 36.07% relative to the year-ago period.
Image Source: Zacks Investment Research
Let’s Get Technical
BECN shares have advanced more than 60% this year. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of higher highs, widely outperforming the major indices. With positive fundamental and technical indicators, BECN stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Beacon Roofing Supply has recently witnessed positive revisions. As long as this trend remains intact (and BECN continues to deliver earnings beats), the stock will likely continue its bullish run into the end of this year and beyond.
Bottom Line
Beacon Roofing Supply is ranked favorably by our Zacks Style Scores with top marks across our Growth, Value, and Momentum categories. This indicates that further upside is likely based on a combination of favorable earnings and sales metrics, as well as valuation and price performance.
Backed by a top industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix. The future looks bright for this highly-ranked, leading stock.
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Bull of the Day: Beacon Roofing Supply (BECN)
Beacon Roofing Supply (BECN - Free Report) , a Zacks Rank #1 (Strong Buy), is engaged in the distribution of roofing materials in the United States and Canada. BECN shares are widely outperforming the market this year and appear poised to continue that trend in 2024. The stock looks primed to break out of a multi-month consolidation pattern, touching a new 52-week high during yesterday’s trading session. Renewed volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.
BECN is part of the Zacks Building Products – Retail industry group, which currently ranks in the top 37% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Beacon Roofing Supply provides residential and non-residential roofing materials and building products to contractors, homebuilders, building owners, lumberyards, and retailers. The company offers a variety of solutions such as pitched and low-slope roofing, gutters and siding, HVAC, and commercial insulation products. BECN also provides building materials such as lumber and composite, plywood, decking and railing, skylights, and windows.
In addition, Beacon Roofing supplies waterproofing products and vapor barriers, as well as tools and equipment such as ladders, power tools, nails, screws, drill bits, and saw blades. The company was founded in 1928 and is headquartered in Herndon, Virginia.
Earnings Trends and Future Estimates
The roofing supplier has put together an impressive earnings history, surpassing earnings estimates in three of the last four quarters. Back in November, the company reported third-quarter earnings of $2.85/share, a 12.2% surprise over the $2.54/share consensus estimate. Beacon Roofing Supply has delivered a trailing four-quarter average earnings surprise of 11.1%.
BECN shares have received a boost as analysts covering the company have been increasing their Q4 earnings estimates lately. For the fourth quarter, earnings estimates have risen 16.08% in the past 60 days. The Q4 Zacks Consensus EPS Estimate now stands at $1.66/share, reflecting a potential growth rate of 36.07% relative to the year-ago period.
Image Source: Zacks Investment Research
Let’s Get Technical
BECN shares have advanced more than 60% this year. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of higher highs, widely outperforming the major indices. With positive fundamental and technical indicators, BECN stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Beacon Roofing Supply has recently witnessed positive revisions. As long as this trend remains intact (and BECN continues to deliver earnings beats), the stock will likely continue its bullish run into the end of this year and beyond.
Bottom Line
Beacon Roofing Supply is ranked favorably by our Zacks Style Scores with top marks across our Growth, Value, and Momentum categories. This indicates that further upside is likely based on a combination of favorable earnings and sales metrics, as well as valuation and price performance.
Backed by a top industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix. The future looks bright for this highly-ranked, leading stock.