Tag Archives: stocks

Building Bases In The Building Products Group

The building construction products group has some highly rated stocks building bases. Could an improving housing market be the catalyst for breakouts? Fortune Brands Home & Security ( FBHS ) made a 2% gain for the day closing at 52.89.  The stock has been hovering around a 51.73 buy point from a cup with handle, but there hasn’t been any volume behind its move above the buy point. The company is involved in products for the homebuilding market, including cabinets, plumbing, doors and security. Cabinets provide 48% of the revenue, followed by plumbing, including the Moen brand, at 30%. According to Fortune Brands’ analysis, the housing market is halfway through its recovery that started in 2012 and they expect to see full recovery back to a steady state by 2018. Housing starts have increased on a seasonally adjusted annual rate, from a low of 600,000 to just over 1 million. They see housing starts picking up to 1.5 million, the historic average since 1965, by the end of the recovery. Masco ( MAS ) is also in the cabinets and plumbing area. It’s largest source of revenue is from plumbing, led by their Delta Faucet brand. Their next largest segment is from their Behr paint brand, which benefits from a strong partnership with Home Depot ( HD ). That’s rounded out by their cabinets and windows. The stock is in its sixth consecutive week up as it forms the right side of a cup. Volume, however, has dwindled below average for all except the first week off the bottom. While that isn’t encouraging, the up/down volume ratio is still neutral at 1.0 and the Accumulation/Distribution Rating is at a B-, suggesting that there wasn’t that much selling to overcome. The base is currently looking at a 30.71 buy point. Acuity Brands ( AYI ) looks to be working on a handle in a cup with handle. The buy point is at 222.95. Acuity Brands was one of the biggest winners featured on IBD’s Leaderboard in 2015. Light Emitting Diode (LED) lighting has been the big growth factor for Acuity, accounting for 46% of sales and 57% of annual growth for fiscal 2015. Commercial and outdoor lighting accounted for 56% of revenue while 18% came from residential. The company benefits not only from new construction but also renovation and retrofitting, with energy efficiency offering a long-term incentive for consumers. While the company gets the bulk of its revenue from its lighting products, it is also looking to grow its Building Automation Systems as a higher-tier level of service. Rather than just a product focus, integrated solutions would focus on how products can work together to create smart homes, smart buildings and even smart cities. One such pilot project is with Simon Property Group ( SPG ) in its malls at Lenox Square in Atlanta and Florida Mall in Orlando. In February, the companies announced a joint program using existing Acuity Brands lighting fixtures and additional sensors in the pilot parking lots. The program will create heat maps to visually represent where parking is most dense and where parking is available. The expectation is to eventually create an app for consumers, available in select shopping centers, by the end of 2016.

Lilly Changes Endpoint For Alzheimer’s Drug Trial; Stock Falls

Big pharma Eli Lilly ( LLY ) changed its goals for a much-anticipated clinical trial of its Alzheimer’s disease drug Tuesday, sending the stock down in a bad day overall for drug stocks. Lilly’s phase-three trial of its drug solanezumab, called Expedition-3, had previously targeted two primary endpoints: a slowing of cognitive decline, and a slowing of functional decline. On Tuesday, Lilly said it was going to keep cognitive decline as the primary endpoint, but functional decline would become a key secondary endpoint. Lilly is expecting to report its first results from the trial late this year, and make a decision about filing for approval based on the outcome. “Emerging scientific evidence supports the idea that cognitive decline precedes and predicts functional decline in Alzheimer’s disease, particularly in earlier stages of the disease,” Lilly said by way of explanation in its press release. Lilly added that “regulators globally will continue to view both cognitive and functional endpoints as necessary for clinical trials in people with mild Alzheimer’s dementia, and regulatory guidance has been to include these as co-primary endpoints,” so it’s not clear how much difference this will make to the drug’s approvability. Nonetheless, a trial that failed a co-primary endpoint would still be a failed trial. “Sounds like Lilly is doing everything they can to improve the success rate of Expedition-3,” wrote Evercore ISI analyst Mark Schoenebaum in an email to clients. Schoenebaum said Lilly told him the decision wasn’t based on data from the trial itself, which the company hasn’t yet seen. Lilly did analyze data from its earlier solanezumab studies Expedition-1 and Expedition-2, however, “and other datasets in the field.” Schoenebaum added that the phase-three trial of a possible competitor from Biogen ( BIIB ), aducanumab, is using a different test that measures both cognitive and functional decline as its sole primary endpoint. Lilly stock hit a 52-week low of 69.60 on the stock market today , on a day when stocks in general and drug stocks in particular were taking a hit. By midday,  it was down 3.5% near 71. Biogen stock was down 2.5% near 250.