First, we got some great earnings from one of our open long-term
ideas in Apogee Enterprises, Inc. (APOG) on Thursday, but despite the
record results, the stock sold off on the heels of the Company’s
earnings report. It wasn’t the backwards looking numbers that seemed to
spook investors, as much as it was the forward guidance. However, to be
perfectly honest, we’re not so convinced the forward guidance is as bad
as some are making it out to be.
Apogee said it expects to see revenue climb by 10% from fiscal 2017
levels, which works out to between $3.35 and $3.55 per share in
earnings. Those assumptions are based on expectations for industry
conditions that include mid-single-digit percentage growth in the U.S.
commercial construction market. But, are they pricing in the possibility
of expanded infrastructure growth here at home over the next several
years? We don’t think so.
The bottom line is although APOG sold off on last week’s news, we’re going to stick with it for now. Investors can’t always expect to catch every idea perfectly at the right time, especially when it comes to good quality companies on a long-term basis. However, we have and continue to like APOG for the long haul. Let’s just hope the Street views the recent selloff as another great buying opportunity in the stock.
As for the broader markets, we’ve been referencing the brewing weakness for quite some time now. As a matter of fact, we first started talking about the issue back in early March, which interestingly enough was the last time the DOW and the S&P 500 made new all-time highs.
Furthermore, it was also the last time we suggested entering into a new idea – and coincidentally enough, one of those new picks was Apogee Enterprises, Inc. (APOG).
The bottom line is although APOG sold off on last week’s news, we’re going to stick with it for now. Investors can’t always expect to catch every idea perfectly at the right time, especially when it comes to good quality companies on a long-term basis. However, we have and continue to like APOG for the long haul. Let’s just hope the Street views the recent selloff as another great buying opportunity in the stock.
As for the broader markets, we’ve been referencing the brewing weakness for quite some time now. As a matter of fact, we first started talking about the issue back in early March, which interestingly enough was the last time the DOW and the S&P 500 made new all-time highs.
Furthermore, it was also the last time we suggested entering into a new idea – and coincidentally enough, one of those new picks was Apogee Enterprises, Inc. (APOG).
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