Seeking Alpha: Wall Street Wants To Like Headwaters, But Should You?

I think everybody has a relative that won't ever let you get past who/what you used to be - it's probably one of those shared human experiences. I find myself slipping into that bad habit when I look at Headwaters (HW). I made some very good returns off this stock many years ago, back in the day when it was a coal treatment company with supposedly exciting catalyst technologies in the works. Management may have seen the writing on the wall with respect to the future of "clean coal," but the company's debt-fueled ventures into building products amidst the housing boom put this company into a bad spot for a number of years.

Now things are different. Headwaters is largely a residential building products company, but with some significant leverage to commercial and infrastructure construction as well. At the same time, the company has made some real strides in improving its debt situation and margin leverage. All of that aside, the sell-side has hiked its target on these shares by almost 100% over the past year (while the stock has climbed more than 40%) and it's worth wondering whether or not a large part of the housing recovery is already baked into the numbers.

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Wall Street Wants To Like Headwaters, But Should You?

Seeking Alpha: Can Stanley Black & Decker Shake Off This Sluggishness?

Given that Stanley Black & Decker (NYSE: SWK) isn't quite as exposed to a U.S. housing recovery as commonly believed, it isn't the uncertain pace there that is keeping growth down. Rather, Stanley Black & Decker is seeing broad-based sluggishness across almost all of its businesses. While further diversification into industrial fasteners makes some long-term sense and the stock's valuation is not demanding, investors will have to have some patience to see this one work out.

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Can Stanley Black & Decker Shake Off This Sluggishness?

Seeking Alpha: Will Exiting Energy Re-Energize Headwaters?

There was a point in time when Headwaters (HW) was an interesting play on clean(er) energy, what with its coal conversion, coal cleaning, and catalyst technologies. As it turns out, most of those energy opportunities really couldn't stand on their own merits and one by one fell to the wayside. Now the company stands as a debt-ridden building products company operating in one of the worst construction markets in living memory. While that sounds bad, and is indeed challenging, it looks like a series of asset sales will keep the company in place to benefit from that eventual rebound in construction activity.

Farewell To Ethanol, Coal Cleaning Next?
Headwaters started the year by announcing the sale of its 51% interest in the Blue Flint Ethanol LLC to its partner Great River Energy for $18.5 million. That was about 20% better than management had led the Street to believe and the added balance sheet flexibility is welcome.

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Will Exiting Energy Re-Energize Headwaters?

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

Investopedia: Toll Brothers Shows Not All Housing Is Terrible

The housing news cycle is still focused on the negative. The dominant stories from day to day still tend to revolve around the large volumes of bank-owned properties, the ongoing issues with the foreclosure process, and more and more stories of the malfeasance of banks, mortgage brokers, realtors and borrowers.

Wise investors know better than to just read the headlines without looking a little deeper. To that end, looking at the recent earnings report from Toll Brothers (NYSE:TOL) suggests that the higher-end housing market is doing OK and seems on track for recovery. That's not such good news for builders like Hovnanian (NYSE:HOV), Lennar (NYSE:LEN) or D.R. Horton (NYSE:DHI), but a recovery somewhere is better than bad news everywhere.

Underlying Second Quarter Results Seem a Little Better 

To be clear, it was not as though the Toll Brothers earnings report was uniformly fantastic. Revenue came in as expected with growth of 3%, but bottom-line earnings were worse than expected due in part to higher impairment charges. While the company did see solid improvement in gross margin (excluding impairments), SG&A was a little higher.

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http://stocks.investopedia.com/stock-analysis/2011/Toll-Brothers-Shows-Not-All-Housing-Is-Terrible-TOL-LEN-DHI-PHM-HD-LOW-MHK0601.aspx