Bull’s Eye Report: Fortune Brands Home & Security (FBHS)

FBHS saw an all-time high in March, but has since pulled back

   

At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
Fortune Brands Home & Security Inc FBHS Building Products 9.2 +12.04% $33.76

Why We Like The Stock:

Fortune Brands Home & Security (NYSE:FBHS) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) in a strong sub-industry. Building products have been hot since the beginning of 2012, as major players like Masco Corp. (NYSE:MAS), Owens Corning (NYSE:OC), Lennox Intl. (NYSE:LII), and FBHS all sport intermediate-term uptrends.

Since Fortune Brands spun off its Home & Security business into FBHS in October of 2011, the stock has been straight up on a weekly basis, with a few short-term periods of sideways action in 2012. More recently, FBHS opened above $38 in mid-March, marking its all-time high. Since then, the stock pulled back to the $34 area, though it has just crossed back above its five- and 10-day moving averages this week. Should the stock continue its march higher following this brief pullback, it could shoot right back up to $38. With a stop at last Friday’s open, we like FBHS at current prices for a move back to recent highs, and thereafter should it continue its intermediate-term uptrend.

We Would Be Buyers:

At the current price (~$35.50), or on a pullback to the 5-day moving average at $34.73.

Company Profile:

Fortune Brands Home & Security, Inc. is engaged in home and security products. The Company operates through four business segments: Kitchen & Bath Cabinetry, Plumbing & Accessories, Advanced Material Windows & Door Systems, and Security & Storage. The Kitchen & Bath Cabinetry segment manufactures custom, semi-custom, and stock cabinetry for the kitchen, bath, and other parts of the home. Plumbing & Accessories segment manufactures and assembles faucets, accessories, and kitchen sinks The Advanced Material Windows & Door Systems segment manufactures and sells fiberglass and steel entry door systems. The Security & Storage segment provides locks, safety, and security devices and electronic security products. The Company was formed as a wholly owned subsidiary of Beam, Inc., formerly Fortune Brands, until it was spun-off on October 3, 2011 and operates independently.

Stock Rating: 9.2

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

Fortune Brands Home & Security – Last Three MonthsFBHS 1 Bulls Eye Report: Fortune Brands Home & Security (FBHS)

Fortune Brands Home & Security – Last 12 Months

FBHS 2 Bulls Eye Report: Fortune Brands Home & Security (FBHS)

Fortune Brands Home & Security – Last Five Years

chart not avail1 Bulls Eye Report: Fortune Brands Home & Security (FBHS)

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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.


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