Q2: Rev and EPS BEAT on 31.5% Sales Growth Revenue of 563.1M (31.5% growth) with EPS of .79 (41.1% growth), turns out all those fears of declining railway ties due to struggling railroads just got disproved with railway tie growth up 11% YoY.
The continued operating leverage improvements that they are able to generate through their acquisition growth strategy and integration from their recent Ram Forest Group and Ramfor Lumber deal continues to accelerate revenue and EPS growth.
With revenue growth across all groups (Railway ties 11.1%, Utility poles 6.7%, Residential Lumber 149.75% and Industrial product 6.3%) they are firing on all cylinders. Looks like there will continue to tuck in these smaller companies and integrate them effectively to deliver.
Valuation wise it looks pretty attractive given the 41% EPS growth it just delivered. Trading at only 16.5x forward P/E with a PEG ratio of 0.63x for 2016. It should trade closer to a 20x forward P/E given its growth and operating performance in the past couple of years. A price closer to 55-60 SP is where I see it going.