Technicalspeculator.com’s Trade-of-the-Week: Universal Forest Products (UFPI)

By Tech_Spec Forbidden
30-July-2019 4:05:10 PM
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This week’s trade comes from the industrial sector, building materials industry of NASDAQ.  Several of the highlights of this trade are the low P/E, the recent breakout of prolonged consolidation and the new all-time high.  All good components for a successful trade.  Enjoy!

Company profile: Universal Forest Products, Inc., through its subsidiaries, designs, manufactures, and markets wood and wood-alternative products in North America, Europe, Asia, and Australia. The company offers preserved and unpreserved dimensional lumber; outdoor living products, including wood and wood composite decking and related accessories, and decorative lawn and garden products; and engineered wood components, which include roof and floor trusses, wall panels, engineered floor systems, I-joists, and lumber packages.  It also provides pallets, speciality crates, wooden boxes, and other containers and products that are used for packaging, shipping, and material handling applications; designs, manufactures, and installs interior fixtures that are used in retail and commercial structures; and provides lumber cut and shaped, plywood, oriented strand board, and dimensional lumber products for use in the construction of manufactured housings. In addition, the company supplies siding, electrical, and plumbing products to manufactured housing and recreational vehicle customers; and wood forms and related products to set or form concrete for various structures, such as parking garages, stadiums, and bridges. Further, it provides framing services; and speciality wood packaging, components, and packing materials for various industries. The company primarily sells its products under the ProWood, Deckorators, and UFP-Edge names. It serves retail market comprising home centre retailers, retail-oriented regional lumberyards, and contractor-oriented lumberyards; industrial market, including manufacturers and agricultural customers; and construction market.

 

Fundamentals:

Trailing P/E: 15.89, Forward P/E: 13.50

EPS: 2.62, Beta: 1.96

PEG: 0.84

P/S: 0.57, P/B: 2.18

Profit margin: 3.63%, Operating Margin: 5.02%

ROA: 7.79%, ROE: 14.78%

Qrtly earnings growth: 23.80%

Current ratio: 2.89

Additional fundamental data: https://finance.yahoo.com/quote/UFPI?p=UFPI

 

Technicals:

Recently broke out of a 19-month consolidation

New 52-week high, New all-time high

Buying momentum (RSI) is positive and rising

Buying volume spiked in July

1st support level is at $39

The safety stop is at $37.25

 

Target is $47.50

Suggested buying approach: Buy a full position in UFPI now. If the stock pulls back, as long as the price is above the safety stop, wait for confirmation of support and then add to the position if desired. Always use a 3% trailing stop.

 

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Author: Tech_Spec

Canada’s only Master of Financial Technical Analysis (MFTA). This 4 – 5 year program offered by the International Federation of Technical Analysts (IFTA) in England is regarded as the global standard. • Instructor of Technical Analysis for the Canadian Securities Institute (CSI). My role is teaching market analysis to industry professionals. • Financial Technical Analyst offering 25 years experience in the financial and investment service industry. • Editor and owner of the Technicalspeculator.com, an on-line independent financial market research and newsletter website. • Registered Securities Advisor

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