Eric Dutram (Zacks)

Eric Dutram (Zacks) by The Financial Exchange


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Time for stock taught me Eric dutrow firm Zacks Eric thank you very much for joining us today. Eric you know we've got a couple of companies actually couple ETFs I believed to go through one of them at least the first company Owens Corning is at the one we're going to be discussing. Yes or get when he TS and one stopped and they are actually both in the same area of building and construction OK I like both for the same reason and that's because. We're clearly at the end of our good luck in terms of affording big hurricanes so I think that's gonna create a lot of demand for new building construction. And then also overseeing a lot of good numbers are the heart housing starts. And new permits as well also I think there's a lot of good trends in the space right now. And Owens Corning's simply want to the stocks have likened the Syria it is a Zacks rank number one strong buy right now so I think there's a lot to like about the state. What what makes them stand out in particular what about their business deal like. So in particular they have a very strong presence in the roofing segment. And in particular they're repair and remodeling segment that accounts for about 80% of everything and roofing is their highest mark in business. Our 23%. You that as a percentage of sales. And this is the largest business they have our revenues so they're tilted toward their higher margin business and as we're seeing with more hurricanes it's gonna create more demand for. New roofing repair and remodeling and that's just really could do Israel and scorn. Is this a company that even stripping out the recent hurricanes you still like over the next couple years. Definitely and this is actually one that I I got forty. The portfolio Iran surprise straighter back before their earnings so this was before these hurricanes really hit. Facing a lot of good trends they're really shifting more towards these higher margin business as. And they're also have a nice international presence to I think this will really come into play. As some the other markets out there start to pick up steam. Let's go talk about the ETF now the powershares dynamic building and construction ETF. You mentioned it's in this sector does that any particular focus though. Not really any particular focus it does have Owens Corning in its portfolio. But it does have thirty stocks in total. Most of them are small and mid cap names but home building accounts for about a quarter of the portfolio widget building products. Home improvement retail so there are names like Home Depot and Lowe's. We get a wide variety companies if you don't wanna pictures morning in the building a church or. Does it tend to because of the presence of homebuilders is it more focused on the residential construction then commercial or industrial or is a nice balance. I think it's a nice balance I mean you are gonna get a little bit more in the residential side just because do have names like The Home Depot and lows and some of those home improvement retail. Players out there but. He does have a nice balance if you look at it does have forced products industrial machinery some renewable electricity in in theirs were also. A pretty nice spells but maybe a slight tilt towards the residential side. What's the expense. On the ETF there. So it is a about point 63% a year and that is largely because it doesn't follow a regular index if you will. It falls one it looks at things like price momentum earnings. Management action value so it is a little bit more active if you will then AM traditional and next but it has beaten. The the larger index that it it's trying to fault for the last five years I think it is one of those cases where and it will put more Mikey worked. Does either Owens Corning or this ETF. Generate anything significant as far as dividends or income. I mean a little bit but that's really in my opinion at least not that the main reason to buy either one or I think it's really more that they a growth story in terms of you know what's gonna happen in in this market not just in the near term but over the next couple years. Very good Eric thank you very much for the time. I Eric a term from Zacks talking about Owens Corning with a ticker. OC and then we also have the powershares dynamic building and construction ETF. That has the ticker PKB. He raises some good points when you think about the damage that was done in Houston. The damage that was done in Florida the damage it's about to be done in sync foray in in Puerto Rico. And vote. Tens if not hundreds of billions of dollars. It's gonna be spent on infrastructure now like I'm including people's homes people's roofs people's cars or. But the big damage I think the the early estimates were what about a 150 billion between. Houston and Florida in that ball parks of the question that I have so Owens Corning since the first hurricane Harvey hit back Ian. Late August early September. The stock has rallied to belts. 11%. OK how much more Joost is there left exactly city market cap it at about a billion dollars in market deposits I elation. It's it's not crazy in this market PE ratio is about 21 so it's a little steep but it's not notes with the way this market is maybe yes and PPE right now is like 26 it's a matter how they can grow their revenue. It is. You know and an overall the nice thing about Owens Corning is you take a look at them over the last couple years. They started to show that they're grown revenue little bit the margins have widened in the last couple years two's they've done a better job of being a little bit more efficient as far as hey we're not spending as much on our revenue. Works out well. With our eight. Well when we come back we'll take a look at what the markets are doing and then we have a report of a new casino. Opening in Connecticut but I think it's just hogwash we'll talk about it anyway. You're listening to the financial exchange with Barry and chuck.