Is Apogee (APOG) Stock Worth Adding to Your Portfolio? - Analyst Blog

Shares of Apogee Enterprises, Inc. (APOG), the designer and developer of value-added glass products, services and systems, reached a new 52-week high of $45.23 on Nov 17 on the back of robust backlog and strength in architectural markets.

Apogee has delivered a solid one-year return of about 35.8% and year-to-date return of 26.6%, outperforming the S&P 500. The company has a market cap of $1.3 billion and long-term estimated earnings per share growth rate of 10%.

Shares of Apogee gained over 23% since the company reported second-quarter fiscal 2015 results on Sep 16. The company reported a 67% year-over-year improvement in earnings per share to 35 cents in the quarter aided by a strong architectural market.

Consolidated backlog at the end of the second quarter increased 58% to $480 million from the prior-year comparable period. Approximately 59% of the backlog or $285 million is expected to be delivered in fiscal 2015 and the balance 41% or around $195 million in fiscal 2016 and beyond.

For fiscal 2015, Apogee revised its revenues guidance and now expects growth of around 20%, up from the previous range of 15%—20%. The company raised the earnings per share projection from the band of $1.40—$1.50 to $1.62—$1.72, to reflect the tax credit of 22 cents earned in the second quarter.

The company's strategy of growing through new products, and expansion in new geographies and markets, has put it on the track to achieve its 2016 targets.

Apogee has reopened its Architectural Glass facility in Utah. The facility, which has been closed since Apr 2013, will resume operations by Jan 2015. This will help the company to meet the growing demand for Architectural Glass. Apogee will also expand its Architectural Finishing facility in Wausau, WI by the second half of fiscal 2016. This will add more than 50% capacity to a critical growth operation.

Given the growth prospects, earnings estimates for Apogee have also been on the rise in the last 60 days. The current Zacks Estimate for fiscal 2015 represents 3.4% year-over-year growth.

Other Stocks to Consider

Apogee currently Carries a Zacks Rank #3 (Hold). Some other stocks worth considering in the same sector include Adept Technology Inc. (ADEP), Alamo Group, Inc. (ALG) and Allegion plc Ordinary Shares (ALLE). All these stocks sport a Zacks Rank #1 (Strong Buy).

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