Monthly Archives: December 2015

New York & Company: Zacks’Bear of the Day Play

The landscape continues to be challenging for many retailers despite improving economy, lower oil prices and healing labor markets.

Headquartered in New York City, New York & Company (NWYSnapshot Report) is a specialty retailer of women’s fashion apparel and accessories. The company’s proprietary branded merchandise is sold exclusively through its national network of retail stores and online at its website. The Company operates about 500 stores in 43 states.

Disappointing Third Quarter Results

The company reported its Q3 results on December 2. While results were better compared to the same period last year, they fell short of Zacks Consensus Estimates.

Gross profit increased 180 basis points to 29% of net sales, versus the prior year gross margin rate of 27.2% of net sales, driven mainly by decreases in buying & occupancy costs and home office payroll resulting from the organizational realignment initiated as part of Project Excellence.
Adjusted operating loss was $2.6 million and represented a significant improvement from an adjusted loss of $6.7 million in the prior-year quarter.

Adjusted EPS (per Zacks calculations) was a negative $(0.05) per share, versus the Zacks Consensus Estimate of $0.00 per share. The company has missed in three out of four past quarters and with Zacks Earnings ESP (Expected Surprise Prediction) of a negative 9.1%, it is expected to miss again for the current quarter.

Downward Revisions

Analysts have been cutting their estimates for the company after quarterly results. Zacks Consensus Estimates for the current and next year are currently $0.00 per share and $0.22 per share respectively, down from $0.10 per share and $0.23 per share, 30 days ago. Declining estimates sent the stock back to Zacks Rank # 5.

The Bottom Line

Declining store traffic and highly promotional environment continue to present challenges for retailers. The company is going through a turnaround attempt and may succeed in the longer term if its efforts bear fruit and consumer spending finally picks up, but the short-term outlook remains cloudy.

The Zacks industry rank for “Retail-Apparel/Shoes” is currently 215 out of 265 (Bottom 19%).

Investors seeking exposure to the industry could look at Abercrombie (ANF) , which currently carries a Zacks Rank #1 (Strong Buy), with Zacks Style Scores of “A” each for Growth and Value.

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General Motors: Zacks’ Bull of the Day Play

Ultra-low interest rates and plunging gas prices have been fueling demand for new vehicles in the US and GM is one of the biggest beneficiaries of this trend. The stock was recently upgraded to a Zacks Rank # 1 (Strong Buy).

About the Company

General Motors (GM) is one of the largest automakers in the world, with more than 212,000 employees in 396 faculties and 21,000 dealers around the world.

GM has five operating segments–General Motors North America, General Motors International Operations, General Motors Europe, GM South America and GM Financial. In the first nine months of 2015, 68.2% of the company’s retail vehicle sales were outside the US.

They produce, sell and service cars, trucks and parts under four core brands – Chevrolet, Buick, GMC and Cadillac.

Car Sales on Track for a Record Year

With strong sales for the month of November, auto sales this year appear to be on track to beat the earlier record set in 2000. GM sold about 229,000 vehicles in the US in November and about 346,000 vehicles in China, which is the biggest market for them. Further due to low gas prices, sales of heavier vehicles have been rising, resulting in higher profits for automakers.

GM has sold about 3.1 million vehicles in China through November this year. Increased demand for SUVs and a new tax incentive by the government is also helping car sales in the world’s largest car market.

Auto industry is currently ranked 43 out of 265 Zacks industries (top 16%).

Strong Quarterly Results

The company reported excellent operating results for Q3, beating the Zacks Consensus Estimate for earnings by a wide margin. Results were boosted by strong US demand for trucks and SUVs. Analysts raised estimates, sending the Zacks Consensus Estimates to $4.78 per share and $5.36 per share respectively from $4.54 and $5.18, before the results. The company has delivered a beat in three out of last four quarters.

Returning Cash to Shareholders

With strong performance in cash generation, the company has been able to return $4.6 billion to shareholders through dividends and share buybacks this year (as of October 19). They had raised their dividend by 20% in April and the stock currently yields 4.2%, making it an excellent holding for income focused investors.

The Bottom-Line

In addition to an improving outlook and a juicy dividend yield, the stock looks attractive on valuation front as well. It is currently trading at 7.22 times 12-month forward earnings, compared to the industry average of 10.42.

During the third quarter, Warren Buffet’s Berkshire Hatchway increased its stake in GM by 22% to 50 million shares from 41 million shares.

GM’s collaboration with Apple to distribute CarPlay—the software that displays an iPhone’s screen on the dashboard and gives access to applications, including Apple’s mapping application, is also reported to be aiding sales.

While higher rates would definitely be negative for the industry, the Fed is likely to move very slowly on rate hikes, and thus the auto industry is expected to continue to do well in the months to come, making this stock a nice addition to any portfolio.

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Disclosure: I own shares of GM for the Zacks Income Investor Portfolio.

Powell Industries: Zacks’ Bear of the Day Play

While consumers are hailing the fall in oil prices, companies that supply these oil companies with industrial infrastructure equipment are beginning to feel the pain.  The overall rig count in the U.S. has been declining over the past few months due to OPEC continuing to produce about 31.5 million barrels a day.  This has put pressure on the smaller U.S. oil companies, which are holding off on drilling new wells because it is not currently profitable with oil prices so low. Further, this low oil price environment is expected to continue for at least the first half of 2016.  Therefore, industrial infrastructure equipment designer, supplier, and manufacturer Powell Industries (POWLSnapshot Report) is the Zacks Bear of the Day.

This Zacks Rank #5 (Strong Sell) sells, designs, develops, manufactures, packages and services systems and equipment for the distribution, control and management of electrical energy and other dynamic processes. The principal products are switchgear and related equipment, bus duct and process control systems. These products and systems are utilized primarily by refineries, petrochemical plants, utilities, paper mills, offshore platforms, commuter railways, vehicular transportation and numerous other industrial, commercial and governmental facilities.

In their most recent earnings announcement, the company missed the Zacks Consensus Earnings Estimate, and slightly beat the Zacks Consensus Revenue Estimate.  The two major areas where the company saw pullbacks was the decline in their backlog, which fell 13% YoY, and overall orders which declined 50% YoY.

Further, this was not just a Powell issue, the entire industrial infrastructure equipment suppliers segment has seen most of their products witness declines in orders especially oil & gas focused products.  Moreover, this trend is not expected to improve as oil prices continue to decline.  There would need to be a large upward swing in oil prices to reverse the yearlong trend, but this is not expected to happen anytime during FY 2016.

According to Michael Lucas, President and CEO, “bookings reflect the lagging effect of reduced capital spending levels in the energy markets.  Capital spending remains depressed and uncertain.  We expect little change in the oil and gas industry outlook in fiscal 2016.”

As you can see from the graph below, estimates have been declining for the past year for Powell.

Declining estimates

Due to the declining orders, earnings estimates for Q1 16, Q2 16, FY 16, and FY 17 have all declined; Q1 16 fell from $0.56 to $0.40, Q2 15 dropped from $0.48 to $0.23, FY 16 plummeted from $1.75 to $0.85, and FY 17 dropped from $1.85 to $0.90.

Bottom Line

With the decline in oil prices, orders for industrial infrastructure equipment has dropped off significantly which has in turn hurt Powell Industries.  Further, this trend is not expected to reverse course in 2016.  Therefore it would be best to stay away from this company until oil prices show a steady rebound.

If you are inclined to invest in the Machine Electrical equipment sector, you would be best served by looking into CUI Global (CUISnapshot Report), which holds a Zacks Rank #1 (Strong Buy), or Franklin Electric (FELESnapshot Report), which carries a Zacks Rank #2 (Buy).

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JA Solar: Zacks’ Bull of the Day Play

Late Tuesday night, Congress voted to extend federal subsidies for renewable energy.  The tax credits were set to decline significantly for the solar subsidy by the end of next year, but U.S. lawmakers extended the credits through 2019.  This applies to commercial installations, and home solar kits.  After 2019, the credit will decline from 30% of the price of a solar array all the way down to 10% in 2022.  According to the Solar Energy Industries Association, this move by Congress could add up to 140,000 jobs to the sector.  Due to this move by Congress, JA Solar Holdings (JASOAnalyst Report) is the Zacks Bull of the Day.

This Zacks Ranked #1 (Strong Buy) is a fast growing manufacturer of high-performance solar cells that is advancing solar photovoltaics as a financially viable yet sustainable solution to balance the world’s environment and energy needs. The Company sells its products to solar module manufacturers who assemble and integrate its solar cells into modules and systems that convert sunlight into electricity.

In their most recent quarter, the company posted exceptional year over year results; Operating profit up +57.8%, Net Income rose +66.4%, Earnings per diluted share improved +73.3%, Net Revenues were up 26.4%, shipments of modules and module tooling rose 54.8%, and total shipments increased 43.5%.

According to Mr. Baofang Jin, CEO, “We are pleased to report strong financial results for the third quarter of 2015 as total shipments of 1.1 GW exceeded the high end of our previous expectations. Strong demand in China continued to drive shipment growth, as China represented 53% of our total shipments during the quarter. We also made great progress on our new cell manufacturing facility in Malaysia during the quarter, and are very excited to have announced the facility’s launch in late October.”

As you can see from the Price and Consensus graph below, expectations going into 2016 elevated.

Increasing Estimates

The move by Congress has caused estimates to rise for JA Solar for Q4 15, Q1 16, FY 15, FY 16; Q4 15 rose from $0.34 to $0.53, Q1 16 improved from $0.16 to $0.22, FY 15 jumped from $1.04 to $1.61, and FY 16 rose from $1.11 to $1.65.

Bottom Line

With Congress extending the full 30% solar tax credit by 3 years, and continuing at a lower rate for another 3 years after that, larger and more profitable solar projects are now being considered and implemented.  This extension will help both the top and bottom lines for JA Solar over the next 6 years.

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Morgan Stanley: Zacks’Bear of the Day Play

Rough trading has led to sluggish performances for a number of key investment houses as of late, including Morgan Stanley ( (MSAnalyst Report). The well-known investment firm has seen its shares tumble by over 7.5% in the past month, while it has plummeted 20% in the past six months as well. But what’s behind this intense selling pressure, besides the overall weak trading environment?

Well the idea that the federal government won’t step in during the next crisis isn’t exactly a plus for MS investors, but there are definitely other issues for Morgan Stanley right now. Recently, the company announced a nearly quarter of a billion dollar settlement to settle MBS claims from the financial crisis, while it also recently cut 1,200 jobs in its FICC (fixed-income, currencies and commodities) unit. The job cuts are also expected to result in $150 million in charges for Q4, adding to Morgan Stanley’s woes.

But the real problem remains the toxic trading environment and the impact this will have on the MS bottom line. We already saw this in the previous quarter’s earnings announcement which easily missed expectations, and with recent worries in the markets there is plenty of reason to believe a similar situation will happen this quarter too. This may be especially true if you look to analysts and their recent earnings estimates for Morgan Stanley stock.

Recent Estimates

Analysts have actually been racing to slash their estimates for MS stock lately as not a single estimate has gone higher for the current year, next year, or current quarter in the past sixty days. Instead we have seen a huge level of agreement among covering analysts that recent earnings expectations are just too high relative to what MS is likely to produce in the near term.

Current year estimates have fallen from $3.03/share to $2.54/share in the past 90 days, while the current quarter estimate has slumped from $0.64/share to $0.50/share in the same time frame. And the most accurate estimates we have are even worse, with the current quarter seeing a 12% decline from even this low consensus.

All of this is pretty awful news for MS investors and especially when you consider that Morgan Stanley has a hard time in living up to expectations on a regular basis. In the past four quarters the company has missed estimates in two of them pushing MS to an average surprise of -12% over the past four quarters.

With these kinds of numbers, it shouldn’t be much of a surprise that MS has earned itself a Zacks Rank #5 (strong sell) and is currently ranked in the bottom 5% of all stocks that we cover, making it a security that you definitely want to avoid right now.

Other Picks

The investment broker industry currently has a pretty weak rank and is actually in the bottom 20% right now. There are far more ‘sell’ ranked securities than ‘buy’ ranked ones in this industry, and there are flat-out just better areas of the financial space to look to in the near term. But if you are dead-set on this area of the financial world, than a look to E-Trade Financial (ETFCAnalyst Report) could be an excellent idea.

Not only does this stock have a Zacks Rank #1 (Strong Buy), but it has a much better track record at earnings season, including an average beat over the past four quarters of 14%. Add in the natural benefit that a stock like this will have when rates rise—thanks to more interest income off of the float—and this could be a winning pick in the broker space, and especially when compared to the still struggling Morgan Stanley in the near term.

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Campbell Soup: Zacks’ Bull of the Day Play

Markets have become extremely volatile lately as investors await news from the Fed regarding an interest rate decision. This has led to big market sell-offs and it has forced investors to reconsider safe haven securities once more. One such stock that has come back into focus thanks to this shift is Campbell Soup (CPBAnalyst Report).

After all, what could be safer than a soup stock in today’s market environment? CPB has a beta of just 0.47 while roughly 80% of the company’s sales come from the domestic market, leaving it with relatively low exposure levels to foreign woes which could be very important today given all the trouble overseas.

But this relative safety isn’t the only reason to like CPB today, as the stock has also seen some pretty impressive growth characteristics when compared to its peers, while it also in a great position if you look to recent earnings estimate revisions as well.

Recent Estimates

While soup might have a reputation as a boring business, CPB actually is sporting a pretty robust growth rate. In fact, current rates suggest 14% earnings growth this year including nearly 10% growth for this quarter (when compared to the year ago period).

These lofty growth projections have certainly been assisted by recent earnings estimate revisions as these changes from analysts have bumped up expectations. In just the past month, the current year EPS consensus has gone from $2.60/share to $2.81/share as nine estimates have moved higher compared to zero lower. We see similar trends of agreement in other time periods too, suggesting that most analysts are getting more bullish on the Campbell story.

Investors should also add in a nice track record of beating estimates including an average beat of 12.6% over the past four quarters and a streak of beats or meets since late 2013. No wonder CPB has earned itself a Zacks Rank #1 (Strong Buy) which is a level that only the top 5% of securities reach at any one time.

Other Factors & Bottom Line

If that wasn’t enough for investors, CPB actually has a pretty good growth score too. The company actually has a ‘B’ grade for growth, putting it in the top 40% overall. This is largely thanks to its industry-crushing projected EPS growth and ROE that is roughly five times the industry average, two factors which point towards what a well-rounded stock CPB is right now.

So if you are looking for a safer choice in today’s market that still has growth potential, CPB might be a good choice. Not only does it have a very low beta and a solid 2.4% dividend, but its good growth rate and rising earnings estimates suggest that it will be a tough stock to beat no matter what happens with the Fed and to start 2016.

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Cubic Corp: Zacks’ Bear of the Day Play

Cubic Corp (CUBSnapshot Report) has been sailing through choppy waters for several years, and the newest hurdle the company is facing is the increased strength of the U.S. dollar, which has added pressure to the company’s income statement.  This net income problem was further exasperated by declines in Joint Readiness Training Center exercises in the fourth quarter 2015.  With the dollar improving against other major currencies, and the expected decline of further JRTC exercises, Cubic is facing several issues it does not have control over, and is therefore, the Zacks Bear of the Day.

This Zacks Rank #5 (Strong Sell) is the parent company of two major business segments: defense and transportation. The Cubic Defense Applications group is a world leader in realistic combat training systems, mission support services and defense electronics. Cubic Transportation Systems designs, manufactures and integrates automatic fare collection systems for public transit projects throughout the world. This includes rail, bus and parking lot systems. The company supplies contactless smart cards; magnetic stripe cards; device software; and transit hardware including gates, ticket machines and card readers. Cubic Defense Applications provides realistic live combat training systems for military forces as well as virtual training systems, constructive simulation support, force modernization, battle command training and education and engineering & technical support.

In their most recent quarter, Cubic saw year over year declines in Net income -39%, Operating income -12%, and Organic sales -2%.  Further, both the Cubic Transportation Systems, and Cubic Global Defense Services saw sales decrease.  Specifically, the Transportation segment saw revenues decline 15% YoY.

As you can see in the Price and Consensus graph below, consensus expectations are repeatedly declining year over year.

Further, as you can see in the comparative graph below, Cubic has been underperforming the S&P 500 for almost the entirety of 2015.

Decreasing Estimates

Estimates for Q1 16, Q2 16, FY 16, and FY 17 have all declined over the past 30 days; Q1 16 has fallen from $0.47 to $0.39, Q2 16 has dropped from $0.58 to $0.56, FY 16 has plummeted from $3.16 to $2.24, and FY 17 has declined from $3.88 to $3.58.

Bottom Line

Foreign currency rates, and a lower number of Joint Readiness Training Center (JRTC) exercises were the main culprits of decreased sales for both of their major segments.  With no indications that the dollar will weaken anytime soon, and the continued decline in JRTC exercises, the light at the end of the tunnel seems very far away. Further, management stated that net income was significantly impacted by the increase in effective tax rates, which also is not appearing to be declining anytime soon.  Therefore it is best to stay on the sidelines with this Zacks Ranked #5 company for the time being.

If you are inclined to invest in the Electronic Products/Misc segment, you would be best served to look into Gigoptix Inc. (GIGSnapshot Report), or Mistras Group (MGSnapshot Report), both of whom carry a Zacks Rank #1 (Strong Buy).
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Dycom Inds: Zacks’ Bull of the Day Play

Dycom Industries (DYAnalyst Report) continues to be at the forefront of the fiber-based broadband revolution, and has significantly beaten the Zacks Consensus Earnings estimate for 7 consecutive quarters.  These big beats are driven by their top 5 customers, who are the leading fiber optic service companies in America.  These major companies like Comcast, and AT&T have increased their fiber to home, and fiber to small business services, which have also accelerated their deployment of fiber-based broadband.  Most importantly, these companies have indicated that they are going to lay more fiber in 2016, and 2017.  Due to these factors, Dycom is the Zacks Bull of the Day.

This Zacks Rank #1 (Strong Buy) is a leading provider of specialty contracting services throughout the United States. These services include engineering, construction, maintenance and installation services to telecommunications providers, underground locating services to various utilities including telecommunications providers, and other construction and maintenance services to electric utilities and others.

In their most recent quarter, the company soundly beat both the Zacks Consensus Earnings and Revenue Estimates for the fourth consecutive quarter.  Further, management saw contract revenues increase by 29.2%, while organic contract revenues grew by 21.9% YoY.  Also, total revenues from acquired businesses improved 1978% YoY.

Most impressively, Dycom’s saw year over year double digit organic growth from their top 5 customers for Q1 16; AT&T improved 15.4%, Comcast rose 21.8%, Centurylink was up 16.5%, Verison was up 71.2%, and their unnamed customer (which everyone believes is Google) improved 120.9%.  Further, these top 5 customers have all indicated that they will continue to lay more fiber broadband in 2016.  This is shown by Dycom’s total backlog increasing 68%, and new orders going up 76%.

During the quarter, the company repurchased 954,000 shares for about $70 million.  This leaves about $50 million remaining on their stock buyback program through February 2017.
Increasing Estimates

As you can see in the graph below, estimates and expectations have significantly increased over the past year.

Over the past 30 days, estimates for Dycom have increased for Q2 16, Q3 16 FY 16, and FY 17; Q2 16 rose from $0.39 to $0.55, Q3 16 improved from $0.72 to $0.83, FY 16 jumped up from $3.27 to $3.86, and FY 17 vaulted from $3.78 to $4.42.

Bottom Line

As the U.S.’s largest wireline, wireless, and cable contractor supporting network Dycom is uniquely positioned to take advantage of the fiber broadband revolution.  Moreover, the government’s Connect America Fund Phase II is expected to build out broadband to nearly 7.3 million rural consumers in 45 states on one U.S territory over the next few years.  This program is expected to benefit Dycom’s top and bottom lines throughout the entirety of the program.

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Macy’s: Zacks’ Bear of the Day Play

While Macy’s (MAnalyst Report) shares might seem a value trading under 10 times next year’s $4 EPS estimate, the problem is that those estimates keep falling.

For the current fiscal year which ends in January, full-year EPS projections dropped from $4.71 to $4.24 in the past 90 days.

And next year’s EPS estimates were slashed by 15% from $4.76 to $4.04. Clearly, growth just went negative for the big M.

Here are the Zacks Detailed EPS tables which show how the consensus estimates have fallen away in the past quarter…

But the best way to visualize this waterfall decline in the Macy’s earnings outlook is via the Zacks proprietary Price & Consensus chart which plots changes in annual EPS estimates against price…

I don’t know all the Retail sector and industry trends deeply enough to conjecture about the future of Macy’s for investors. Clearly, so much shopping has migrated to online venues that you can probably predict as well as I which jungle the money is flowing through.

Into the Jungle, or the Ether

But Amazon (AMZNAnalyst Report) and it’s ilk aren’t getting all the lost “bricks” business either.

I learned about an interesting aspect of this puzzle from our resident economist John Blank last month. He recently saw noted Retail expert Dana Telsey speak in LA and she talked about the “invisible” sales making it hard to track the success or demise of some retail business models. Here’s how John summed it up for me…

“She basically said she thought this Xmas shopping season looked soft at retail. One of the new issues to look out for, in terms of retail competition, she said is the ‘invisible’ loss of market share. The idea is that young girls etc. are emailing and texting one another pics of their favorite look and buying it. Then, the sales disappear at retail. The store retailer doesn’t really know who took the business. With Snapchat, Instagram and other services doing the legwork, it is impossible to tell right now.”

As far as Macy’s goes, it’s probably best to stand aside until these estimates stop going down and begin to turn around. The Zacks Rank will let you know.

Kevin Cook is a Senior Stock Strategist for Zacks where he runs the Follow The Money (FTM) portfolio.

Gibraltar Industries: Zacks’Bull of the Day Play

Gibraltar Industries (ROCKAnalyst Report) is an $800 million manufacturer and distributor of metal building products for the industrial, infrastructure and residential markets.

The stock is the cream of the crop along with Masco (MASAnalyst Report) in a Zacks industry that is struggling with other players such as USG Corp (USGSnapshot Report), Caesar Stone (CSTESnapshot Report), and United Rentals (URISnapshot Report).

ROCK is North America’s leading manufacturer of ventilation products, mail storage solutions including mailboxes and package delivery products, bar grating, expansion joints and structural bearings, plus ground mounted solar racking and commercial greenhouses.

The company is divided into three reporting segments: Industrial and Infrastructure Products, Residential Products and Solar Mounting and Commercial Greenhouses.

Pedal to the Metal

As residential and commercial construction markets have stepped on the gas this year, Gibraltar has benefited greatly. In the company’s recent Q3 earnings report, net sales for the third quarter of 2015 increased 30 percent to $305.0 million, compared with $234.1 million in the third quarter of 2014.

Adjusted net income was $15.7 million, or $0.50 per diluted share, compared with $9.5 million, or $0.30 per diluted share, in the third quarter of 2014.

That $0.50 EPS represented the company’s sixth consecutive earnings beat. Below is a look at how quickly analysts have scrambled to catch up to ROCK’s earnings growth by raising their estimates.

This is the Zacks proprietary Price & Consensus chart showing the change in consensus estimates for a give year plotted against the stock price…

As you can see, the stock move higher this year was built on the back of rising estimates. Zacks followers know this because ROCK shares became a Zacks #1 Rank (Strong Buy) in July and this was reiterated in August and October as analysts had to keep revising higher.

Global Metal ROCK-er

Gibraltar operates facilities in the United States, Canada, England and Germany.

In the Industrial and Infrastructure Products segment, Gibraltar is the self-described market leader in the fabrication of metal bar grating that is used in the oil and gas, manufacturing, chemical processing and leisure/sports park markets. The company also claims leadership in engineered bearings and joints used in bridge construction, roads, and airport runways.

It seems that the company’s diverse product segments and lines and international markets has shielded it from the downturn in oil & gas industry construction needs.

Gibraltar also has a leading position in the production of expanded and perforated metal which is used in a wide variety of applications within commercial construction, transportation and petrochemical markets.

In the Residential Products segment, Gibraltar serves the ventilation and air management market with a variety of roof, foundation and interior ventilation products, plus rain dispersion and outdoor comfort products. It also provides postal and parcel solutions for single and multi-family residences and large and small commercial centers. These products include single unit mailboxes, centralized mailboxes and electronic package lockers.

Going Green is Nothing New

A Gibraltar subsidiary, Rough Brothers Inc., has designed, manufactured and installed educational and commercial greenhouses, garden centers and conservatories since 1932. Their sole focus is building the custom greenhouses and conservatories that help commercial growers, retail garden centers, research facilities, universities and schools throughout the country.

RBI Solar, a sister company of Rough Brothers, designs, manufactures and installs solar mounting systems for commercial and utility scale solar projects. As a specialist in ground mount, roof mount, landfill and custom designed specialty solar structures, RBI provides best-in-class solar racking solutions and project management capabilities to serve project developers and system integrators.

Historically over 90% of the public conservatories in the United States were built by a firm called Lord & Burnham. To expand and enhance their conservatory design capabilities, in 1988 Rough Brothers acquired Lord & Burnham’s drawings, design details and equipment. As the company says, “This is just one more tool that allows Rough Brothers to deliver the precise and pristine detail requirements of conservatory and greenhouse construction, whether for new or historic greenhouse and conservatory restoration.”

The ROCK Bottom Line is Green Too

If you are looking for an investment to play the booming construction markets, this well-diversified small cap with strong double-digit EPS growth projected into next year should be at the top of your list.

Kevin Cook is a Senior Stock Strategist for Zacks where he runs the Follow The Money (FTM) portfolio.