Quanex Building Products (NX): Thin Film Solar Connection Could Boost Shares
SummaryDespite significant exposure to the US residential real estate market, I believe that Quanex (NYSE: NX), a recent spin-off, has solid appreciation potential over the next few years. My optimism is based on the following two factors: the company's growing presence in the thin film solar market, and a pristine balance sheet ($50 million in net cash, $2 million in debt, and $20 million in cash pending receipt), which should allow NX to pursue highly accretive acquisitions in the current weak operating environment. In addition, the stock's low valuation, already appears to reflect the well-known problems in US residential real estate. As such, a slight sentiment change in the macro environment, combined with a growing recognition of NX's solar and other green growth opportunities, could lift the shares.
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