One Big, One Small
|Written by GSCR Staff|
|Wednesday, 18 July 2012 09:19|
Housing starts for June 2012 were the best numbers we have seen since 2008. Recent results from homebuilders have further reinforced the theory that the housing market maybe starting to come back.
There are 2 stocks that stand to benefit from this trend---one large, and one small.
Mueller Industries (NYSE – MLI - $43.83) is one of the largest producers of copper, brass and plastic tubes and fittings for the plumbing, refrigeration and OEM market. A good deal of the Company’s sales is tied to the housing industry. MLI, which traces its roots back to 1900, is expected to earn $2.85 this year and $3.25 next year. It is a great stock to buy on dips and we think it can approach $50 in a year’s time.
PGT, Inc. (NASDAQ – PGTI - $3.36) engages in the manufacture and supply of residential impact-resistant windows and doors. The company offers impact-resistant products, including heavy-duty aluminum or vinyl frames with laminated glass to provide protection from hurricane-force winds and wind-borne debris. It operates in the southeastern United States, the Gulf Coast, the Coastal Mid-Atlantic, the Caribbean, Central America, and Canada. While a good portion of revenue is derived from Florida, which remains in a major housing slump, the Company has thrived through geographic sales diversification which has enabled PGTI to have one of the highest gross margins in the industry. The stock just hit a new 52-week high and could go to $5.00 as momentum continues.
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