GMS Inc. ( GMS Quick Quote GMS - Free Report) recently acquired two companies and opened a greenfield yard and two AMES store locations. On Apr 3, GMS acquired Engler, Meier & Justus, Inc. (EMJ) and Blair Building Materials, Inc. EMJ is a leading distributor of drywall, acoustical ceilings and related interior construction products. Its multiple brands serve greater Chicago, IL, market with the above-mentioned products and EIFS-related products in the Southeastern U.S. The two Chicago locations will add to GMS’ commercial capabilities and EIFS locations in Charlotte, Raleigh and Doraville to the company’s Complementary Product offerings in the Southeast. Blair operates in the Greater Toronto Area and provides customers with exteriors, insulation and waterproofing products. The buyout represents a strategic opportunity to expand GMS’ access to exterior product lines such as brick, stone and masonry. Additionally, GMS unveiled a greenfield location in Ottawa to enhance the service and geographic reach of DL Building Materials in Canada. Moreover, its AMES platform added two new stores in Myrtle Beach, SC and Olive Branch, MS, to meet its growth strategy. Stock Performance
Shares of GMS dipped 5.45% on Apr 4, post-news release, but increased by 17.5% in the past six months. The Zacks
Building Products - Retail industry increased 4.1% in the period. Image Source: Zacks Investment Research
The company’s solid price performance is mainly driven by a significant backlog of homes under construction, continued strength in multi-family and improving levels of commercial activity. Also, favorable pricing across the product categories, positive volume growth in Wallboard, Ceilings and Complementary Products and the benefit from the AMES acquisition added to the positives.
GMS banks on four core strategic initiatives, namely, expanding scale in the core products, building complementary product offerings, accretive acquisitions and greenfield opportunities and improving productivity and profitability. Its market-leading position, significant scale, balanced mix of commercial and residential customers and wide range of product offerings bode well. Zacks Rank & Key Picks
Currently, GMS carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Some better-ranked stocks in the Zacks Retail-Wholesale sector are Chuy's Holdings, Inc. ( CHUY Quick Quote CHUY - Free Report) , Arcos Dorados Holdings Inc. ( ARCO Quick Quote ARCO - Free Report) and Bloomin' Brands, Inc. ( BLMN Quick Quote BLMN - Free Report) . Chuy’s Holdings currently sports a Zacks Rank #1. CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.8% and 19%, respectively, from the corresponding year-ago period’s levels. Arcos Dorados currently sports a Zacks Rank #1. ARCO has a long-term earnings growth of 7.8%. The Zacks Consensus Estimate for Arcos Dorados’ 2024 sales and EPS suggests growth of 8% and 11.4%, respectively, from the year-ago period’s levels. Bloomin' Brands carries a Zacks Rank #2 (Buy). BLMN has a long-term earnings growth rate of 12.3%. The Zacks Consensus Estimate for Bloomin' Brands 2024 sales and EPS suggests growth of 2.4% and 5.5%, respectively, from the year-ago period’s reported levels.