Seeking Alpha: Norcraft Executing Its Model To Good Effect

Even though the new housing market has yet to rebound as strongly as many have hoped, the remodeling market has been stronger. That, coupled with strong discipline to drive an improved mix and walk away from low-margin business, has helped Norcraft (NYSE:NCFT) post solid revenue growth and margin improvement in recent quarters.

Better sales and margins have also been good for the stock, which has risen about 38% since my last piece on this cabinet maker in May of 2014. To be sure, it hasn't been that hard to make money in stocks tied to remodel/renovation, as direct competitors like Fortune Brands Home & Security (NYSE:FBHS), Masco (NYSE:MAS), and American Woodmark (NASDAQ:AMWD) have risen 14%, 26%, and 101% respectively, and other plays on the space like Mohawk (NYSE:MHK), Headwaters (NYSE:HW) (a building materials company), and Armstrong World Industries (NYSE:AWI) have rise 33%, 41%, and 5% respectively over that same period of time.

There's still a lot to like about Norcraft, and next week's (March 30th) earnings report could be another opportunity for management to deliver further improvements in mix and margins. These shares don't look so cheap these days, though another beat-and-raise quarter will at least kick the argument about valuation down the road a little further.

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Norcraft Executing Its Model To Good Effect

Seeking Alpha: More R&R Won't Mean Much Rest For Norcraft

As residential property values continue to recover, it should only mean good things for demand for Norcraft's (NCFT) kitchen and bathroom cabinets. One of the top five cabinetmakers in the country, and one of the top three in the dealer channel, Norcraft's sales are leveraged in part to improving remodel and renovation demand (which is, in turn, leveraged to improving home values). With experienced management and a tailwind to margins from higher capacity utilization, Norcraft shares still appear to be priced to offer some upside to the ongoing housing recovery.

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More R&R Won't Mean Much Rest For Norcraft