Western Insulation, a wholly-owned subsidiary of Masco Corporation (MAS), will start operating as Masco Contractor Services of California, Inc. effective from Jan 1, 2014.
Masco Contractor Services is a group of subsidiaries of Masco Corporation. With the recent change, Masco Contractor Services will operate 13 offices in California.
Western Insulation offers products and services like fireplace installation, garage door services, gutter installation and gutter protection. Insulation has been one of the underperforming businesses of Masco for the past few quarters.
At its investor conference, Masco management highlighted several strategic initiatives, which included the improvement of underperforming businesses like Installation and Cabinet; solidifying its market position and leveraging its brands, product introductions and product innovation, reducing costs, paying off debt and strengthening the balance sheet.
Masco Corporation sales in the month of November were up in high single-digit; signaling that the fourth-quarter top line could be strong like the past two quarters.
Masco’s third-quarter (results announced in late October) sales increased 12.4% year over year and also beat the Zacks Consensus Estimate driven by volume growth. Volumes benefited from products/programs launches; increased new home construction activity and improvement in repair/remodel activity in North America; and increased outside U.S. sales. Most encouragingly, the company saw some traction in big ticket remodeling, which has been sluggish for the past few years, especially during the housing downturn. In addition, management stated that the fourth quarter was off to a strong start with October sales up in high single-digits. With the November sales also up equally, Masco could post another strong quarterly performance next month.
We are encouraged by the company’s continued focus on product innovation and cost improvements. The company is also divesting its less profitable and underperforming assets to focus more on its core areas. Masco carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Investors interested in the building/construction industry can also consider CaesarStone Sdot-Yam Ltd. (CSTE), Trex Co. Inc. (TREX) and James Hardie Industries plc (JHX). While CaesarStone and James Hardie carry a Zacks Rank #1 (Strong Buy), Trex carries a Zacks Rank #2.