Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Headwaters Continues To Build Out A Niche Materials Business

This has been a rough year for companies hoping to leverage a nascent recovery in residential construction, residential remodel/repair work, and light commercial construction. Ply Gem (NYSE:PGEM), Louisiana-Pacific (NYSE:LPX), and James Hardie (NYSE:JHX) have done worst than most, but even Armstrong World Industries (NYSE:AWI) and Mohawk (NYSE:MHK) have done pretty poorly. Against that backdrop, Headwaters' (NYSE:HW) steep correction from the start of July is still unpleasant to behold, but the stock still has a double-digit gain on a year-to-date basis.

I think a large part of the problem with Headwaters' shares has been inflated expectations, as the company continues to execute reasonably well. I'd like to see...

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