Let's cut right to the chase. I really have no idea whether American Woodmark (NASDAQ:AMWD) really has its business positioned for sustained growth, or whether this is yet another head-fake. This company and its stock just seem unusually volatile -- and it's not like the underlying market for cabinetry is that chaotic.

Whatever the case, this was one of the good quarters. Sales were up 4% (better than expected), with so-called "core sales" up an even better 9%. What's more, the company's drive to improve margins through tighter operations and an exit from lower-margin segments seems to be paying off. Gross margins improved about three-and-a-half points, and operating margins improved by an even greater extent.

The quality of the earnings report seems solid as well. Sadly, there was no cash flow statement in the release, but growth in both inventories and receivables was moderate.

So what does the future hold for American Woodmark? Heck if I know.

First, you have to account for the pace of new homebuilding (presently weakening) and remodeling or refurbishment. (If you figure that out, go buy or sell Toll Brothers (NYSE:TOL) or DR Horton (NYSE:DHI) while you're at it.) Second, you have to figure out how much Lowe's (NYSE:LOW) and Home Depot (NYSE:HD) will let American Woodmark succeed -- ask Stanley Works (NYSE:SWK) what changes to inventory-stocking policy can do to margins. And, of course, there are other factors, like the cost of fuel and materials and the competitive responses of Masco (NYSE:MAS), Fortune Brands (NYSE:FO), and so on.

All in all, we're talking about a company with decent returns, a good operating plan, and solid insider ownership -- but also a large-ish short position. We're also talking about a stock that has been unusually unstable, which operates in an increasingly nervous segment. I wouldn't be too inclined to chase the stock on good days, but it might be worth a look again on one of those seemingly inevitable slides.

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Fool contributor Stephen Simpson but has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).