Updated Research Report on Gibraltar Industries - Analyst Blog

On Mar 28, 2014, we issued an updated research report on Gibraltar Industries Inc. ROCK. The company delivered impressive earnings per share in the fourth quarter of 2013, which increased roughly 60% year over year to 8 cents. Moreover, quarterly revenues of $188.8 million were up 9.4% from the year-ago quarter.

The company recorded a rise in sales primarily from organic sales hike. Gibraltar Industries witnessed an improvement in sales of residential new construction as well as repair and remodeling activities during the quarter.The increase resulted from growth in unit volume along with gains in postal products. Gibraltar Industries' West Coast operations were a major contributor to growth. These operations are expected to improve further in the coming quarters, along with providing operational efficiencies.

Gibraltar Industries has significant cash available on its balance sheet, which it intends to use either for acquisitions or reinvesting in organic growth. Moreover, the company reduced its interest expense by redeeming 8% Senior Subordinated Notes with the issue of 6.25% Senior Subordinated Notes in Jan 2013.

However, Gibraltar Industries is exposed to customer concentration risks as it derives a large portion of its sales from only a handful of customers. Furthermore, the company does not have long-term contracts with its clients. This leads to a possibility of termination of the purchase leading to severe loss.

Key Picks from theSector

With a current market capitalization of $580.8 million, Gibraltar Industries sports a Zacks Rank #1 (Strong Buy). Other stocks worth a look in the industry include NN Inc. NNBR, USG Corporation USG and United Rentals, Inc. URI. While NN carries the same Zacks Rank as Gibraltar Industries, USG Corp and United Rentals hold a Zacks Rank #2 (Buy).