Apogee Enterprises (APOG): Share price in bullish 'flag'

Posted Apr 14th 2008 1:15PM by Larry Schutts
Filed under: Earnings Reports, Analyst Upgrades and Downgrades, Bank of America (BAC), Technical Analysis, Stocks to Buy

Apogee Enterprises (NASDAQ: APOG) designs and develops value-added glass products, services and systems. The architectural products and services division makes and installs glass walls and windows for commercial and institutional buildings. The large-scale optical segment manufactures glass and acrylics for the custom picture framing market and produces optical thin-film coatings for consumer electronics displays. The Bank of America (NYSE: BAC) is a leading commercial client. PPG Industries (NYSE: PPG) is a major competitor.

The firm pleased investors last week, when it reported Q4 EPS of 49 cents and revenues of $243.3 million. Analysts had been expecting 45 cents and $236.1 million. Management also guided FY09 EPS to $1.82-$1.94 ($1.72 consensus) and FY09 revenues to $987.6 million-$1.0 billion ($963.0M consensus). Company backlog was said to be at a record level. Jesup & Lamont subsequently reiterated its "buy" recommendation on the issue and declared a $28 price target.

APOG shares popped on the news and have since been consolidating the gain in a bullish "flag" pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Altogether, brokers now recommend the issue with three "strong buys", one "buy" and one "hold". Analysts see a 14% average annual growth rate, through the next five years. The APOG P/E ratio (11.33), PEG ratio (0.81), Price to Sales ratio (0.56), Price to Book ratio (1.72), Price to Cash Flow ratio (7.35), Price to Free Cash Flow ratio (15.60) and EPS Growth rate (53.13%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $14.08 and $30.30. A stop-loss of $17.00 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

Tags: APOG, Apogee Enterprises, ApogeeEnterprises, flag, fundamental analysis, FundamentalAnalysis, momentum, technical analysis, TechnicalAnalysis

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Reader Comments (Page 1 of 1)

4-14-2008 @ 2:00PM

B. Harrison said...

per the article: ". . .designs and develops value-added glass products, services and systems. The architectural products and services division makes and installs glass walls and windows for commercial and institutional buildings"

And the glut of the current over construction, and shakey financiingof major projects isn't gooing to impact sales for the next 18 -36 months minimally? Wouldn't that would appear to be a contradiction?

4-14-2008 @ 4:15PM

ldschutts said...

Apogee is involved in the commercial construction market and that is in better shape than the homebuilding market. Note, too, that much of Apogee's work is in renovation and maintenance. The firm does not rely strictly on new building. Even on that side, though, they occupy a solid position. The company has provided the glass work on such projects as the Bank of America Tower, the Mandalay Bay Resort, Seven World Trade Center and the Clinton Library. Investors seem to like the stock's chances. That flag is still developing nicely.

Larry Schutts