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.
|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.
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 12 Months
Fortune Brands Home & Security – Last Five Years
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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.