We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Hold on to Universal Forest (UFPI) Stock Now?
Read MoreHide Full Article
On Mar 9, Zacks Investment Research upgraded Universal Forest Products, Inc. (UFPI - Free Report) to a Zacks Rank #3 (Hold) from a Zacks Rank #4 (Sell). Going by the Zacks model, companies with a Zacks Rank #3 have chances of delivering in-line performances with the broader market over the upcoming quarters.
Why Should You Hold the Stock?
Universal Forest has been working diligently to improve its products and services, in a bid to tap market opportunities. Regarding inorganic growth, the acquired assets of Idaho Western, Inc. (Jun 2016) are likely to solidify the company's businesses in the manufactured housing and retail markets. Also, in Sep 2016, it acquired the custom merchandising solutions provider, idX Corp. Further, in Dec 2016, Universal Forest acquired all outstanding shares of the Australian wood packaging and alternative material products manufacturer, The UBEECO Group Pty. Ltd. This acquisition is likely to boost the company's industrial packaging businesses in the near term.
Universal Forest anticipates top-line improvement in 2017, backed by the addition of customers and products to its portfolio. Also, increasing demand in the U.S. construction market is expected to bolster the company’s revenues.
New product sales are estimated to constitute at least 10% of total sales. Further, it intends to offer high-quality products to its customers, supported by its new development and testing facilities.
However, we note that Universal Forest yielded a return of 19.24% – underperforming the 28.29% gain recorded by the Zacks categorized Building Products Wood industry.
The company's businesses are directly influenced by the U.S. housing market. Any recurrence of untoward situations might produce an unfavorable impact on its sales, earnings and cash flow in the quarters ahead. In addition, headwinds stemming from customer-concentration risks and stiff competition pose serious threats to Universal Forest's growth.
The company derives a major portion of its sales from The Home Depot. Any reduction in orders from this source may hurt the company's financial growth. Notably, rising expenses have been a major issue for Universal Forest. The company has no control over the costs and selling prices of lumber products, which are dependent on factors like government policies, environmental regulations, weather conditions, economic conditions and natural disasters. Universal Forest intends to grow its revenues and margins via increased business internationalization. Moreover, international operations expose the company to several economic, political and environmental headwinds.
Over the last seven days, the Zacks Consensus Estimate for the stock remained unchanged for both 2017 and 2018, reflecting neutral stance of the market.
Stocks to Consider
Some better-ranked stocks within industry are listed below:
TopBuild Corp. (BLD - Free Report) currently carries a Zacks Rank #2 (Buy) and has a positive average earnings surprise of 27.38% for the trailing four quarters.
D.R. Horton, Inc. (DHI - Free Report) also holds a Zacks Rank #2 and has a positive average earnings surprise of 6.27% for the past four quarters.
8 Stocks with Huge Profit Potential
Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should You Hold on to Universal Forest (UFPI) Stock Now?
On Mar 9, Zacks Investment Research upgraded Universal Forest Products, Inc. (UFPI - Free Report) to a Zacks Rank #3 (Hold) from a Zacks Rank #4 (Sell). Going by the Zacks model, companies with a Zacks Rank #3 have chances of delivering in-line performances with the broader market over the upcoming quarters.
Why Should You Hold the Stock?
Universal Forest has been working diligently to improve its products and services, in a bid to tap market opportunities. Regarding inorganic growth, the acquired assets of Idaho Western, Inc. (Jun 2016) are likely to solidify the company's businesses in the manufactured housing and retail markets. Also, in Sep 2016, it acquired the custom merchandising solutions provider, idX Corp. Further, in Dec 2016, Universal Forest acquired all outstanding shares of the Australian wood packaging and alternative material products manufacturer, The UBEECO Group Pty. Ltd. This acquisition is likely to boost the company's industrial packaging businesses in the near term.
Universal Forest anticipates top-line improvement in 2017, backed by the addition of customers and products to its portfolio. Also, increasing demand in the U.S. construction market is expected to bolster the company’s revenues.
New product sales are estimated to constitute at least 10% of total sales. Further, it intends to offer high-quality products to its customers, supported by its new development and testing facilities.
However, we note that Universal Forest yielded a return of 19.24% – underperforming the 28.29% gain recorded by the Zacks categorized Building Products Wood industry.
The company's businesses are directly influenced by the U.S. housing market. Any recurrence of untoward situations might produce an unfavorable impact on its sales, earnings and cash flow in the quarters ahead. In addition, headwinds stemming from customer-concentration risks and stiff competition pose serious threats to Universal Forest's growth.
The company derives a major portion of its sales from The Home Depot. Any reduction in orders from this source may hurt the company's financial growth. Notably, rising expenses have been a major issue for Universal Forest. The company has no control over the costs and selling prices of lumber products, which are dependent on factors like government policies, environmental regulations, weather conditions, economic conditions and natural disasters. Universal Forest intends to grow its revenues and margins via increased business internationalization. Moreover, international operations expose the company to several economic, political and environmental headwinds.
Over the last seven days, the Zacks Consensus Estimate for the stock remained unchanged for both 2017 and 2018, reflecting neutral stance of the market.
Stocks to Consider
Some better-ranked stocks within industry are listed below:
Dycom Industries, Inc. (DY - Free Report) has a positive average earnings surprise of 17.30% over the last four quarters and presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TopBuild Corp. (BLD - Free Report) currently carries a Zacks Rank #2 (Buy) and has a positive average earnings surprise of 27.38% for the trailing four quarters.
D.R. Horton, Inc. (DHI - Free Report) also holds a Zacks Rank #2 and has a positive average earnings surprise of 6.27% for the past four quarters.
8 Stocks with Huge Profit Potential
Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>