AWI
Armstrong World Industries Inc
Industrial/Transportation
04/15/2015
Presented
| Date | 04/09/2015 |
| Price | $55.48 |
| Market Cap | $3.06B |
| Ent Value | $3.93B |
| P/E Ratio | 30.3x |
| Book Value | $11.77 |
| Div Yield | N/A |
| Shares O/S | 55.13M |
| Ave Daily Vol | 740,000 |
| Short Int | 8.44% |
Current
| Price | $138.65 |
| Market Cap | $6.06B |
| Armstrong World Industries, Inc. designs, manufactures, and sells flooring products and ceiling systems worldwide. The company’s Building Products segment produces suspended mineral fibers, soft fibers, and metal ceiling systems for use in commercial, institutional, and residential settings, as well as complementary ceiling products; and sells suspension system products. This segment sells its commercial ceiling materials and accessories to resale distributors and ceiling system contractors; and residential ceiling products to wholesalers and retailers, including large home centers. Its Resilient Flooring segment manufactures vinyl sheet and tile flooring, as well as sources and sells laminate flooring products, vinyl tile products, vinyl sheet products, linoleum products, adhesives, and installation and maintenance materials and accessories. This segment sells its products to wholesalers, large home centers, retailers, and contractors, as well as to the manufactured homes industry. The company’s Wood Flooring segment offers pre-finished solid and engineered wood floors, and related accessories for use in new residential construction and renovation with various commercial applications in stores, restaurants, and offices. This segment sells its products to independent wholesale flooring distributors and large home centers. The company primarily offers its products through building materials distributors. Armstrong World Industries, Inc. was incorporated in 1891 and is headquartered in Lancaster, Pennsylvania. |
Publicly traded companies mentioned herein: Armstrong World Industries (AWI), Lumber Liquidators (LL)
Highlights
The presenter is long shares of Armstrong Worldwide (AWI) because he believes the company’s earnings power is far greater than the market appreciates. Based on management guidance and Street estimates for 2015, shares appear to be “fairly valued” at ~$56; however, Street estimates for 2015 and 2016 are too low, in his opinion. His model suggests the ceiling business alone could be worth $75, and flooring $16. Using today’s multiples on future EBIT, he can make a case for shares to trade up to $85 over the next 12 months relatively easily. In addition, AWI has announced its intent to spin-off of the flooring business in the 1st quarter of 2016.
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