Sunday, August 2, 2015

In this trading environment you need to look for solid companies with little debt. If you like the stock of Home Depot, you will probably also like the stock of American Woodmark Corp. (AMWD)

Dow Jones Industrial Average 17,690  (Down)  Week ending 07-31-2015

Greetings. I found a really nice small-cap stock that only two analysts are following. One has a Buy rating and one has a hold. My rating is to buy it on a pullback, because it just had a recent big breakout and run up in price. 

The company is  American Woodmark Corp. (Symbol AMWD, $65.76). 

"American Woodmark Corporation manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets. American Woodmark was incorporated in 1980 by the four principal managers of the Boise Cascade Cabinet Division through a leveraged buyout of that division. American Woodmark was operated privately until 1986 when it became a public company through a registered public offering of its common stock.
American Woodmark currently offers framed stock cabinets in approximately 500 different cabinet lines, ranging in price from relatively inexpensive to medium-priced styles. Styles vary by design and color from natural wood finishes to low-pressure laminate surfaces. The product offering of stock cabinets includes 85 door designs in 21 colors. Stock cabinets consist of cabinet interiors of varying dimensions and construction options and a maple, oak, cherry, or hickory front frame, door and/or drawer front.
Products are sold under the brand names of American Woodmark®, Timberlake®, Shenandoah Cabinetry®, Shenandoah Value Series ™ , and Waypoint Living Spaces®."

Sales through Home Depot and Lowe's make up about 45% of American Woodmark's company revenues.

AMWD based in Winchester, VA. has an ROE of 16.30 and the PEG Ratio is a little out of whack at 3.72, (That is why you should wait for a little bit of a pullback before you purchase shares). The current PE is 29.76.

The company had revenues of $825.5 Million last year and has a market cap of 1 Billion dollars. The company has a very healthy Quick Ratio of 2.9 to 1 and a Current Ratio of 3.32 to 1. The company has little to no long term debt. It pays a 0.55% dividend currently.

Earnings per share for 2015 are looking like $2.54 per share and for 2016 they look like $3.13 per share. Earnings this year are up 68.7%. EPS for the past 5 years have averaged 27.7% gain per year. 2016 earnings growth is projected to be at 15.71% and for 2017 19.34%.

The stock price has performed very well recently with a YTD gain of 62.61% and One year gain of 123.67%.

So a really nice American small cap stock to buy for you. Again, need to wait for a little pullback to jump in. (maybe when the Fed raises interest rates this year in around a month from now.)

Then when you make you big profit money you can go out to Home Depot or Lowe's and get yourself some new kitchen cabinets made by American Woodmark. Then everybody is happy!

Catch you next time around,


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