Is Masco an Outperform?

With shares of Masco Corporation (NYSE:MAS) trading at around $20.68, is MAS an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Masco experienced a nice gap-up yesterday thanks to strong earnings that beat expectations. Q4 adjusted EPS came in at $0.04 versus an expectation of -$0.01. Q4 revenue came in at $1.89 billion versus an expectation of $1.79 billion. Revenue was also up 8.6 year-over-year.

International sales declined 1 percent, but North American sales increased 12 percent. All five operating segments showed positive sales growth and improved profit. Gross profit margins increased to 25 percent from 21.1 percent. Operating profit margins increased to 5 percent from 1.6 percent. Plumbing Products net sales increased 10 percent. Decorative Architectural Products net sales increased 11 percent. North American Cabinetry sales increased 13 percent.

With all this positive news, it might seem as though we’re living in a fairytale-like dream. That’s a possibility, and we’ll cover that possibility in the Trends section. For now, let’s take a look at some important numbers prior to forming an opinion on the stock…