SolStock/E+ by way of Getty Pictures
Funding Thesis
I beforehand coated American Woodmark (NASDAQ:AMWD) in June the place I cited The agency’s potential to ship enhanced income progress and margins Inside The approaching quarters. Whereas The agency did submit good end outcomes final quarter and made significant progress When it Includes margin enhancement, its inventory has corrected ~7% since our final safety in sync with the broader markets. I think about It is even A greater buy On The current levels as valuations have Discover your self to be extra engaging. AMWD expert strong gross sales progress final quarter As a Outcome of of power of its new enhancement, and restore and reworkling companies. The strong builder backlog is assisting the gross sales progress in new enhancement, the placeas The enlargement in restore and rework enterprise is assisted by progress throughout sellers/distrihoweverors And residential centre channels. In the shut to time period, the elevated backlog levels in new enhancement Collectively with incremental pricing movements ought to assist the gross sales progress. Whereas the incoming order prices are anticipated To say no in 2H FY23 due to a slowdown Inside the housing enterprise, I am not too apprehensive about it As a Outcome of the prolonged-time period fundamentals of the housing enterprise stay strong with beneficial demographic trfinishs and the low housing inventory. The prolonged-time period trfinishs Inside the restore and reworkling enterprise Additionally Should revenue from doc-extreme house equity levels. The agency May even be working in the direction of restoring its margins to pre-Covid levels. With current chain constraints easing and The agency’s pricing movements taking primarytain, it appears achievable and this …….