Breakout Should Lead to Quick Run in OC

by Sam Collins | January 19, 2012 7:57 am

Owens Corning (NYSE:OC[1]) — This producer of glass-fiber reinforcements and building materials, including roofing materials, has predicted that roofing demand could reach the highest levels in 15 years.

Wall-board shipments rose 4% in Q3, the first year-to-year increase since 2006. And a 35% increase in wall-board prices will take effect this year, according to Fitch.

The results of an increase in home construction would directly benefit OC with a dramatic increase in earnings from the estimate of $2.30 in 2011.

This was on our list of Top Stocks to Buy for January[2], when we said, “Technically the stock has formed a ‘V’ bottom and a break through the resistance band at $30 to $32 should result in a quick run to $36-$38.”

That breakout occurred yesterday. Longer term expect much higher prices that should track an economic recovery.

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