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

Investopedia: Home Depot Moves From Good To Great

While it shouldn't really surprise anybody if there's a little volatility or turbulence along the way, it looks like the long-awaited remodeling upturn is firmly in place now. Not only did Home Depot (NYSE:HD) trounce expectations for same-store sales growth, but companies like American Woodmark (Nasdaq: AMWD), RPM (NYSE:RPM), and Stanley Black & Decker (NYSE:SWK) are seeing improved prospects as well. While these shares didn't do much over the last three months and the valuation is not what I'd call “screaming bargain”, I wouldn't step in front of the momentum with my own money.

Read more here:
http://www.investopedia.com/stock-analysis/082013/home-depot-moves-good-great-hd-low-swk-rpm.aspx

Investopedia: American Woodmark Making The Best Of The Worst

When you sell products into the housing market and the housing market is going through its worst stretch in living memory, the rest of the story goes pretty much the way you would expect. From peak to trough, cabinet and vanity maker American Woodmark (Nasdaq:AMWD) saw sales drop more than 50% and free cash flow plunge into the red.

That said, American Woodmark hasn't really done any worse than rivals like Masco (NYSE:MAS) or Fortune Brands Home & Security (Nasdaq:FBHS) in terms of market share, and has only had one year of negative free cash flow. With a clean balance sheet and major placement in both Home Depot (NYSE:HD) and Lowe's (NYSE:LOW), this may be a "when, not if" recovery story that could pay off for patient investors.

Read the full piece here:
http://stocks.investopedia.com/stock-analysis/2012/American-Woodmark-Making-The-Best-Of-The-Worst-AMWD-MAS-FBHS-HD0607.aspx

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.


Continue on via the link below:
http://stocks.investopedia.com/stock-analysis/2011/Signs-Of-Dry-Rot-In-The-Building-Market-UFPI-LOW-USG-AMWD-HD0628.aspx