Investopedia: Louisiana-Pacific Still Bleeding

With a headline on a major internet news site proclaiming Tuesday morning that 30% of all mortgages in the U.S. are underwater, the problem for Louisiana-Pacific (NYSE:LPX) is pretty obvious. True, building and remodeling activity has not ceased entirely, but there's a lot of bubble-built capacity out there, and not nearly enough activity to let a leading building materials company like Louisiana-Pacific profit. It's not hard to build a model that suggests LPX is significantly undervalued, but with so much of the recovery baked into those years far ahead, the uncertainty is sky-high.

Some Good, Some Bad In the Third Quarter  
To be sure, it's not as though activity has ground to a halt. LPX actually reported 9% sales growth for the quarter, with basically flat results in Oriented Strand Board (OSB), 7% growth in siding and 44% growth in engineered wood products. For the most part, a familiar theme still rings true - volume growth is there, but pricing is weak.

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Investopedia: Signs Of Dry Rot In The Building Market

It is easy to get confused and frustrated trying to figure out the housing and homebuilding market these days. A company like Toll Brothers (NYSE:TOL) can seem to be doing a little better, only to see news a few weeks later about dour housing starts or hear disappointing news from Lender Processing Services (NYSE:LPS) about the state of foreclosures. 

Adding fuel to the fire is Friday's news from Universal Forest Products (Nasdaq:UFPI) that their traditional peak selling season was disappointing and the lumber market is in tough shape. While bad news at UFPI does not guarantee bad news for Pulte (NYSE:PHM), Lowe's (NYSE:LOW), USG (NYSE:USG) or American Woodmark (Nasdaq:AMWD), it does offer up evidence that the long-hoped for recovery is still waiting to bloom.

When a Peak Becomes a Valley
The period from March to May is supposed to be some of the strongest months in the year for Universal Forest Products, a producer of lumber and various building products. Unfortunately, the company announced last Friday that year-to-date sales were down 9.5% through May, retail sales were down 15% and the lumber market declined for 11 straight weeks during what should have been a strong selling period.


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Acuity Brands Still Waiting For The Turn

Non-residential construction is still in a dark place, and that has kept the prospects for Acuity Brands (NYSE:AYI) dim as well. Even still, this leading lighting company has managed to tread water through difficult times and could be relatively close to a turning point. 

The Quarter That Was
The company's fiscal fourth quarter was another tough one, but Acuity nevertheless managed to surprise and surpass the analyst expectations. Revenue rose 5%, helped by a 6% boost in volume. Although the companies' quarters do not line up evenly (Acuity has a August year-end), this result is somewhat mixed relative to rival lighting companies - Hubbell (NYSE:HUB.A) had nearly 11% growth in the last quarter, while Cooper (NYSE:CBE) had a little more than 5% growth.

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