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My scope is to assist private companies both abroad and domestic wishing to go public in the U.S. We invest in the company in the earliest stages, and assist in coordinating their audit, legal RTO or IPO. We also offer M&A identification, execution and consulting, Investors relations... More
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  • Housing Sector Growth Predicted, And The Emerging Growth Companies That Will Benefit 0 comments
    Dec 18, 2012 6:46 AM | about stocks: EXP, FIX, FOR

    In 2013 nearly half the companies in the S&P 600 are expected to see sales grow less than 5 percent and another 200 businesses are expected to see sales growth in the 5 to 10 percent range. But there is one sector of the economy that is anticipated to expand in 2013 and that is housing. A number of industry players are expected to raise sales by 30 percent or more in 2013 and perhaps grow at a healthy pace in 2014 as well. Businesses in the home construction supply-chain should prepare for a tidy increase in sales in 2013. As a result some emerging growth suppliers in this segment are positioned to benefit.

    Forestar Group Inc. (NYSE: FOR) is a real estate and mineral resource firm based in Austin, Texas. The company owns over 300,000 acres of land located in seven states and 13 markets and roughly 622,000 acres of oil and gas mineral interests. At first glance, this may not seem like a housing pick. After all, this company owns enormous tracts of land and, recently, has been allowing mining concerns to basically make use of the land for minerals. But executives have continually pointed out that its holdings consist of first-class residential locations, and in the right housing market, Forestar intends to make a load of cash by selling land to real estate developers. Analysts predict that will be the case in 2013, so asset sales should energize an 84 percent rise in sales to $262 million. Before the housing market tumbled, the stock traded for $25 a share. Shares, now at $16, don't reflect the value to be tapped in the balance sheet as real estate prices strengthen.

    Eagle Materials (NYSE: EXP) is a company that provides an extensive range of materials that are used in construction, from wallboard to concrete. From 2004 to 2007, Eagle's sales skyrocketed from $503 million in fiscal 2004 to $922 million in fiscal 2007, which coincided with the end of the housing explosion. But, by fiscal 2011, revenue had tanked to just $462 million, leading to earnings of just $0.34 per share. That figure is less than a tenth of what the company earned in fiscal 2007. Sales were up 7 percent in 2012 to $495 million, and according to analysts are likely to rise 30 percent this fiscal year. Experts are predicting a sales jump of close to 40 percent in the fiscal year that begins next April to roughly $900 million. That puts the company close to where they were in 2007. Even nicer, per share profits are also expected to rise at a fairly quick pace.

    Companies such as Melbourne, Florida based Goldfield Corp. (Nasdaq: GV) and Houston basedComfort Systems USA (NYSE: FIX) are also well positioned to ride the anticipated increase in the housing sector. GV's claim to fame is electrical construction and real estate development nationwide. Comfort Systems is in the commercial heating, ventilating and air conditioning game. It focuses is on large office buildings, retail centers, apartment complexes and manufacturing places.

    The companies mentioned in this article were selected randomly from hundreds of emerging growth options that are properly placed to make impressive gains in a housing sector upswing. But, also consider the risks before investing, the largest being a looming fiscal cliff that could derail more than the imminent growth in housing.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Stocks: EXP, FIX, FOR
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