Investopedia: UFPI Tries To Wait Out The Storm

In the food chain of building products, Universal Forest Products (Nasdaq:UFPI) is stuck in an uncomfortable middle. UFPI doesn't grow trees, so it doesn't have the luxury shared by Plum Creek (NYSE:PCL) or Rayonier (NYSE:RYN) of just trimming back harvests and waiting for the bad times to pass. As a value-added producer of wood products, it also cannot do much to drive demand - if Pulte (NYSE:PHM) isn't building homes and if remodelers aren't heading to Home Depot (NYSE:HD) to get supplies for remodeling projects, there's almost nothing the company can do about it.


Consequently, while UFPI appears in many respects to be a well-run company, it is in pretty rough shape these days. A recovery in the core markets is an eventual inevitability but can the company and its shareholders hold on long enough to reap the benefits?

Another Tough Quarter
UFPI has been on an unfortunate run of late, and the third quarter isn't any different. Revenue was basically in line with analyst expectations, but still down more than 2%. On the margin side, the picture is more mixed: the company did better than might be expected given the market conditions, but the company still missed the bottom line estimate.


To read the full article, please follow the link below:
http://stocks.investopedia.com/stock-analysis/2011/UFPI-Tries-To-Wait-Out-The-Storm-UFPI-PCL-HD-MHK-LPX-BLDR-THO1017.aspx