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NCI Building Announces Share Repurchase Program Worth $50M


In an effort to reward shareholders, the board of directors of NCI Building Systems, Inc. NCS has sanctioned a new stock repurchase program, enabling the company to buy back shares worth up to $50 million.

On Sep 8, 2016, the company’s board of directors had authorized the earlier stock-repurchase program for the repurchase of up to an aggregate of $50 million shares. Notably, NCI Building has bought back shares worth around $37.7 million to date, during the fourth quarter of fiscal 2017, completing the majority of the authorization.

During the fiscal second-quarter conference call, NCI Building trimmed its revenue guidance range to $1.75-$1.78 billion for fiscal 2017 due to choppy market activity. Further, the company’s performance is expected to be hampered by potential temporary disruptions at customer job sites due to Hurricane Harvey. Lower volumes in the legacy Components segment due to the persistent weak market activity also remains a concern.

NCI Building Systems, Inc. Price

NCI Building Systems, Inc. Price | NCI Building Systems, Inc. Quote

In the past year, the stock has also underperformed the industry it belongs to. Its share price has gained 7.3%, compared with 19.8% growth registered by the industry.

Despite these challenges, NCI Building’s cost-saving initiatives in manufacturing consolidation and ESG&A are projected to generate $30-$40 million in cost savings by the end of fiscal 2018. Moreover, the company’s focus on buybacks and cost savings will drive profitability in the near term.

Zacks Rank & Stocks to Consider

Currently, NCI Building has a Zacks Rank #5 (Strong Sell).

Better-ranked stocks in the same sector include Owens Corning OC, KB Home KBH and Potlatch Corporation PCH.

Owens Corning sports a Zacks Rank #1 (Strong Buy) with an expected long-term earnings growth rate of 14.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.

KB Home carries a Zacks Rank #2 (Buy) and has an expected long-term earnings growth rate of 19.5%.

Potlatch Corporation also carries a Zacks Rank #2 and has an expected long-term earnings growth rate of 5%.

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