Universal Forest Products Inc. Stock Upgraded (UFPI)

NEW YORK ( TheStreet) -- Universal Forest Products (Nasdaq: UFPI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 18.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • UFPI's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Building Products industry. The net income increased by 213.2% when compared to the same quarter one year prior, rising from -$3.67 million to $4.16 million.
  • Net operating cash flow has significantly increased by 59.20% to -$44.65 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.66%.
  • UNIVERSAL FOREST PRODS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNIVERSAL FOREST PRODS INC reported lower earnings of $0.23 versus $0.89 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.23).
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Universal Forest Products, Inc., through its subsidiaries, engineers, manufactures, treats, distributes, and installs lumber, composite wood, plastic, and other building products for the DIY/retail, site-built construction, manufactured housing, and industrial markets. The company has a P/E ratio of 140.9, below the average materials & construction industry P/E ratio of 141.4 and above the S&P 500 P/E ratio of 17.7. Universal Forest has a market cap of $641 million and is part of the industrial goods sector and materials & construction industry. Shares are up 4.7% year to date as of the close of trading on Thursday.

You can view the full Universal Forest Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff

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