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Quanex Building (NX) Hits 52-Week High on Upbeat FY18 View

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Shares of Quanex Building Products Corporation (NX - Free Report) crafted a fresh 52-week high of $24.05 on Dec 14, eventually closing lower at $23.80. An encouraging outlook for fiscal 2018 drove the company’s share-price performance.

The company has a market cap of $829.2 million. Over the last three months, its average volume of shares traded has been roughly 163K.

Notably, the stock has gained 13% over the past three months, higher than the S&P 500 index’s gain of 6.7%. Quanex Building has also outperformed the industry’s gain of 8.4% during the same time frame with respect to price performance.



Favorable Rank & Style Score

The company currently carries a Zacks Rank #3 (Hold). Further, Quanex Building has an impressive VGM Score of B. In this, V stands for Value, G for Growth and M for Momentum, and the score is a weighted combination of these three scores. Such a score eliminates the negative aspects of stocks and selects winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM Score.

Our research shows that stocks with Style Scores of A or B, when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3, offer the best investment opportunities.

What Led to the 52-Week High?

On Dec 11, Quanex Building posted fourth-quarter fiscal 2017 results, wherein adjusted earnings dropped 17.8% year over year due to lower volumes and short-term inefficiencies related to transitioning away from its less profitable wood-flooring business. Recent hurricanes in the United States also affected earnings in the quarter. In addition, revenues fell 6.5% year over year in the quarter.

Despite posting disappointing fiscal fourth-quarter results, Quanex Building anticipates elevated demand for its products in the coming quarters as rebuilding efforts remain on track. The company also remains well positioned for growth and margin expansion in the near future.  

Notably, Quanex Building expects to generate net sales in the range of $890-$900 million in fiscal 2018, reflecting growth of 4.5% at the mid-point compared to fiscal 2017. Adjusted EBITDA is estimated to lie in the band of $103-$108 million.  

The company will continue to invest in automation across all divisions, with a continued focus on the North American Cabinet Components segment. It expects capital expenditure will be between $25 million and $30 million for the long term.

Stocks to Consider

Some better-ranked stocks in the same space are Boise Cascade Company (BCC - Free Report) , Patrick Industries, Inc. (PATK - Free Report) and United Rentals, Inc. (URI - Free Report) . All three stocks sport a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Boise Cascade has a long-term earnings growth rate of 17.6%. Its shares have appreciated 72.9%, year to date.

Patrick Industries has a long-term earnings growth rate of 11.5%. So far this year, shares of the company have gained 27.5%.

United Rentals has a long-term earnings growth rate of 18.5%. The company’s shares have rallied 52.6% during the same time frame.

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