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Universal Forest Sells Asset for Improved Operating Metrics

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Universal Forest Products, Inc.(UFPI - Free Report) recently sold and leased-back its 35-acre Medley, FL-based facility, on the wake of becoming a more efficient supplier and manufacturer going forward. Share price of the company remained nearly flat at $37.84 as of Jan 23, 2018, post this divestment news.

Over the last six months, Universal Forest Products’ shares yielded a return of 30.8%, outperforming 14% gain recorded by the industry.

This Zacks Rank #3 (Hold) stock is poised to grow on the back of sturdier U.S. construction market demand, new product launches and meaningful acquisitions.

However, headwinds such as lumber market volatility, unfavorable foreign currency translation impact and stiff industry rivalry might thwart growth scopes in the quarters ahead.

Inside the Headlines

Universal Forest Products tries to deploy capital efficiently in order to maximize investment returns. The company perceives that divestment of its Medley facility will improve its logistics, boost up operational efficiencies and rebuild newfangled growth opportunities in Florida. Notably, the company specified that it would also optimize its three other operations in order to underpin its competency in the region.

Universal Forest Products noted that its affiliate Aljoma Lumber (acquired in 2017 to strengthen Caribbean and South Florida business) will continue to function out of its present location until a new site is recognized. The company remarks that this prominent pressure-treated lumber producer is still important for the company’s commercial growth.

Going forward, Universal Forest Products acknowledges the existence of immense growth opportunities in South Florida end-markets in the domains of construction, retail and industrial. Notably, it would continue to offer services to the Caribbean customers from the existing operations of Puerto Rico and Florida.

Stocks to Consider

Some better ranked stocks within the same space are listed below:

Potlatch Corporation (PCH - Free Report) currently sports a Zacks Rank #1 (Strong Buy). The company’s earnings per share (EPS) is projected to be up 5% in the next three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.

Floor & Decor Holdings, Inc. (FND - Free Report) presently holds a Zacks Rank #2 (Buy). The company’s EPS is predicted to grow by 21.7% in the next three to five years.

Louisiana-Pacific Corporation (LPX - Free Report) also holds a Zacks Rank #2. The company’s EPS is predicted to grow by 5% in the next three to five years.

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