Armstrong World Industries, Inc. (AWI) hit a new 52-week high of $61.29 and then closed at $61.08 on Jan 10. With this, the Lancaster, Pa – based global leader in designing and manufacturing of floors and ceilings systems surpassed its previous 52-week high of $59.34 reached on Jan 3. The company has long-term estimated earnings per share growth rate of 15.89%.
Over the 52 weeks, Armstrong World’s share price has ranged from a 52-week low of $44.93 on Jun 24, 2013 to the new 52 week high of $61.08 on Jan 10. The company has delivered a one-year return of about 11%. Average volume of shares traded over the last three months is approximately 756K.
What’s Driving Armstrong World Upward?
Armstrong World Industries announced management changes on Nov 5. Following the retirement of Frank Ready, Thomas Mangas has been appointed as its chief executive officer. Mangas had previously served as chief financial officer of Armstrong since Feb 2010, leading Finance as well as Information Technology, Global Business Services and Process Improvement. David Schulz succeeds Mr. Mangas. Armstrong World’s shares have benefited on expectations that Tom Mangas, being a seasoned leader given his global mindset and customer focus, will boost Armstrong’s flooring business.
On Nov 7, Armstrong World Industries announced that two of its major shareholders, The Armstrong World Industries, Asbestos Personal Injury Settlement Trust and Armor TPG Holdings have floated a combined 6 million shares of the company's stock in an underwritten secondary public issue. The initial price to the public was set at $51.00 per share. As the effect of this offering of shares owned by asbestos-claims beneficiaries subsided, Armstrong World’s share prices got a boost.
Armstrong World expects sales in the range of $2.70 – $2.74 billion in 2013. The company expects its adjusted EPS to lie between $2.15 and $2.45.
Armstrong World successfully executed a $260 million share repurchase program during the third quarter. This will boost EPS and create value for its shareholders. Furthermore, increasing new factory utilization will boost earnings in 2014. Also, the company is expected to fully benefit in 2015 and 2016 from its recent investments.
Other Stocks to Consider
Armstrong World currently retains a Zacks Rank #4 (Sell). Some better performing stocks worth considering in the sector include James Hardie Industries plc (JHX), Masco Corporation (MAS) and United Rentals, Inc. (URI). While James Hardie holds a Zacks Rank #1 (Strong Buy), Masco and United Rentals carry a Zacks Rank #2 (Buy).
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