UPDATE: Stifel Nicolaus Initiates Headwaters Incorporated at Buy on Construction Recovery

Stifel Nicolaus initiated coverage on Headwaters Incorporated

with a Buy rating and a $11.00 price target. Stifel Nicolaus noted, "We caution that the company's reasonably high leverage and cyclicality of the business pose higher risks, but we believe that they are in the early stages of an economic recovery for this sector and that these leverage factors should play to the equity's advantage. … We find the combination of events compelling and believe that both business segments can enjoy the benefit of a material recovery in commercial and residential construction activity, which appears to be finally underway." Headwaters Incorporated closed at $9.21 on Friday.