Stock To Watch In 2017

(RTTNews) - This stock comes on our radar on the merit of its upbeat quarterly results. We believe the company has solid growth potential, as it expands through accretive acquisitions. In the next few-months, we see the stock touching new highs, and expect at least 20% upside from current levels.

Installed Building Products, Inc. (IBP), the company in focus, installs insulation and complementary building products.

In January, IBP closed the buy of Alpha Insulation and Waterproofing Company, its largest acquisition to-date. The acquired company provides waterproofing, insulation, fireproofing, and fire stopping services to commercial contractors with nine locations throughout the southern U.S. with trailing-twelve month revenues of about $89 million.

IBP views the Alpha acquisition as an accretive one that would facilitate its quick expansion and diversification into the commercial-end market.

Jeff Edwards, Chairman and Chief Executive Officer of IBP, stated, "Commercial sales represented approximately 12% of IBP's 2016 revenues and, as 2017 benefits from the addition of Alpha, we expect a greater proportion of our revenues will be from this market. Our residential and commercial markets are showing continued signs of expansion and we are optimistic these trends will remain throughout 2017. As a result, we expect 2017 to be another strong year of revenue and earnings growth."

Revenue for the fourth quarter rose 22.2% to $233.98 million from $191.5 million last year. Gross margin improved to 29.3% from 28.4%. Net income rose to $11.1 million, or $0.35 per share from year-ago $9.3 million, or $0.30 per share. Adjusted earnings rose to $13.9 million, or $0.44 per share from $10.7 million, or $0.34 per share. Analysts were modeling earnings of 40 cents on revenues of $232.8 million.

IBP featured on RTT's premium service - Short-Term Investor - on May 5, 2016 at an opening price of $28.5. On November 17, the stock touched $41.20, representing a gain of 45% from our published price.

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