Masco (MAS) Gets Another Bull as Cramer Chimes In
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Masco Corp. (NYSE: MAS) is rebounding after a slight dip Monday as two Wall Street firms starting coverage on the company.
Goldman restarted its coverage on Masco with a Sell rating, while Credit Suisse was at Outperform.
Monday night, Jim Cramer chimed in on the initiations, siding with Credit Susse this time around. He noted that Goldman thinks investors should look to non-residential construction names as the U.S. housing market continues to heat up.
Goldman also alluded to how some categories, like insulation, are peaking and the best may be bhind Masco right now. Cramer countered that insulation only counts for about 16 percent of Masco's total revenue and about 73 percent of revenue comes from the repair and remodel markets. Those two markets are seeing continued strength outside the new home construction market, because as home values rise, people are willing to spend more on their dwellings.
Goldman also looked at Masco's balance sheet, seeing margin pressure and other items that didn't appeal to the firm. Cramer acknowledged that the company has a lot of debt, but is also expected to generate $1.5 billion in free cash flow over the next year.
With Masco going for 19 times profit expectations and sporting a growth rate of around 44 percent, Cramer thinks this stock is one to watch as home values and housing continue to show improvement.
Goldman restarted its coverage on Masco with a Sell rating, while Credit Suisse was at Outperform.
Monday night, Jim Cramer chimed in on the initiations, siding with Credit Susse this time around. He noted that Goldman thinks investors should look to non-residential construction names as the U.S. housing market continues to heat up.
Goldman also alluded to how some categories, like insulation, are peaking and the best may be bhind Masco right now. Cramer countered that insulation only counts for about 16 percent of Masco's total revenue and about 73 percent of revenue comes from the repair and remodel markets. Those two markets are seeing continued strength outside the new home construction market, because as home values rise, people are willing to spend more on their dwellings.
Goldman also looked at Masco's balance sheet, seeing margin pressure and other items that didn't appeal to the firm. Cramer acknowledged that the company has a lot of debt, but is also expected to generate $1.5 billion in free cash flow over the next year.
With Masco going for 19 times profit expectations and sporting a growth rate of around 44 percent, Cramer thinks this stock is one to watch as home values and housing continue to show improvement.
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