In a shortened week due to Good Friday, I saw a name that I used to hold when I was the editor of Home Run Investor. That stock did great for me back then and as I look at the trends in its industry, now is a great time to look at it again. 

Apogee Enterprises (APOG - Free Report) is currently a Zacks Rank #3 (Hold) but is coming off a miss of the Zacks Consensus Estimate (but a beat of the Wall Street estimate due to how Zacks accounts for options expenses).

Why I Like It

Right now, I am all about revenue growth and I think we see that from APOG. In the most recent quarter the company reported $274M on top and that was $3M below the Zacks Consensus Estimate and the same amount below where revenue was in the previous quarter. On Thursday morning the company is expected to report $289M, which would be record revenue.

Shorts Could Cover

Everyone knows that we are in a bull market, especially the shorts. They have been hammered of late and could be close to capitulating on a number of stocks. I mention this as APOG has about 28M shares in its float and 18.4% of those shares are sold short. 

That is a pretty big bet against a stock that could very well post record revenues in a sector that has seen a government promise of huge spending increases. This is not to say that the government is going to start ordering glass buildings via APOG, but a rising tide tends to lift all ships.

Apogee Enterprises, Inc. Price, Consensus and EPS Surprise

Apogee Enterprises, Inc. Price, Consensus and EPS Surprise | Apogee Enterprises, Inc. Quote

Style Scores

The Zacks Style Scores for APOG are looking strong. There is an “A” in Momentum and “B” for Growth. I am more into growth than value and I really like to see a divergence between the growth and value style scores. The basic idea is that value investors and growth investors are generally looking for vastly different things so I don’t often want to see “straight A’s” for a stock.

That said the Style Score of “C” is still quite reasonable. Let’s look more into that in the next section.

Valuation

APOG trades at a discount to the industry average in most of the measures that investors tend to look at. I see APOG trading at 15.9x forward earnings and that clocks in a little below the industry average of 16.3x. The discount really starts to show with the price to book multiple of 3.7x which is well below the 7.4x industry average. Finally, the price to sales multiple of 1.6x is just below the 1.8x industry average, but still shows the stock trading at a discount.

Finally let’s look at table of revenue and earnings growth. With the exception of the 2016 set of numbers, APOG is showing better revenue and earnings growth than the industry average. When you add to that the idea that it is trading at a discount and earnings are right around the corner it makes it worth a deeper look.

Price Targets

I only see one recent price target for APOG. Craig Hallum initiated coverage on the stock in mid-January and placed a $68 price target on the stock. All other price targets are older than 3 months without an update.

Maybe it was around that report and price target that inspired an options player to move in on the $60 May calls. 

$APOG set to report Wednesday, a fav. GARP name, the 1,600 May $60 calls bought on 1/26 remain in OI pic.twitter.com/yqW4Adc6wV

— Joe Kunkle (@OptionsHawk) April 9, 2017