Why Universal Forest Products Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Universal Forest Products (NASDAQ: UFPI  ) , a supplier of wood and wood-related products sold at do-it-yourself retailers and to construction companies, rose as much as 10% after announcing the closure of its acquisition of Minnesota-based Custom Caseworks by one of its subsidiaries.

So what: Custom Caseworks, a high-precision manufacturer of wood products throughout the United States, should help expand Universal Forest's offerings and expand its geographic reach. In addition, today's fiscal cliff deal averts what could have been a major slowdown in the housing sector and gives Wall Street a reason to believe that home sales will continue to tick modestly higher.

Now what: There are few companies I would even consider as an investment if it relates to housing, but Universal Forest Products is one of them. Unfortunately, much of Universal's value has been baked into the stock over the past year, but with the mortgage interest deduction remaining untouched, and investments largely escaping higher levels of taxation, the housing sector could be in for another strong year.

Craving more input? Start by adding Universal Forest Products to your free and personalized Watchlist so you can keep up on the latest news with the company.


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