The Back Door

March 4, 2013
| Markets & Trends

Windows on Wall Street

From Lincoln International

The W&D Stock Index got off to a strong start in 2013, with a gain of 5.7% in January as compared to 3.5% for the S&P 500. The index significantly outperformed the market in 2012, with gains of 50.2% versus 14.3% for the S&P 500. Data indicates a recovery in the construction market is well underway, with total housing starts estimated to reach 780,000 in 2012, as compared to 554,400 at the bottom of the market in 2009. In December 2012, housing starts were at a seasonally adjusted annual rate of 954,000, representing a 12.1% increase from the revised November estimate and a 36.9% increase from December 2011. In another positive development, the Standard & Poor’s/Case-Shiller Index showed that home prices rose 5.5% in November 2012 over the same period a year earlier, the strongest increase since August 2006. The home price increases were broad based, with 19 of the 20 metropolitan areas in the index registering gains, and 11 of the cities seeing yearly gains of more than 7%.


The WD Stock Watch includes a select list of publicly-traded companies involved in the window and door industry. For *EV/EBITDA: EV (enterprise value) = Market value of stock plus debt outstanding minus cash, and EBITDA = Earnings before interest, taxes, depreciation and amortization. Data provided courtesy of Lincoln International.

Note: Local currency converted to USD using historical spot rates. The WD Stock Index consists of the above stocks weighted by market cap. Data provided courtesy of Lincoln International.

Market Snapshot—New Construction

Builder confidence in the market for single-family homes was virtually unchanged in February, declining one point from January to 46 on the National Association of Home Builders/Wells Fargo Housing Market Index. “Following solid gains over the past year, builder confidence has essentially leveled out and held in the same three-point range over the last four months,” says NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “This is partly due to ongoing uncertainties about job growth and consumer access to mortgage credit, but it’s also a reflection of the fact that builders are now confronting rising costs for building materials and, in some markets, limited availability of labor and lots as demand for new homes strengthens.” NAHB Chief Economist David Crowe adds, “The index remains near its highest level since May of 2006, and we expect home building to continue on a modest rising trajectory this year.”


Source: National Association of Home Builders. The HMI is based on a monthly survey of builders, in which they are asked to rate the current business climate. Any number over 50 indicates that more builders view sales conditions as good than poor.

Tax Credits—Too Little Too Late?

Following the passage of the American Taxpayer Relief Act of 2012 earlier this year, Window & Door asked industry representatives for their opinion as to how the inclusion of energy efficient tax credits for windows, doors and skylights would impact the industry. Poll results suggested that for tax credits to be a worthwhile incentive for the purchase of energy efficient windows and doors, they need to be larger. While most within the industry agreed that the $1,500 credits available in 2009 and 2010 had an impact on the industry, few see the same happening with the $200 maximum credit for windows, or even the $500 available for doors and other products.

Closing Thoughts—Job Creation

“Job creation through advances in manufacturing is critically important to growing America’s economy. Companies like Quanex … that manufacture energy efficient products, are so important to bringing manufacturing jobs back… . Not only will these advanced manufacturing jobs help build a sustainable future by fulfilling the need for energy efficient homes and commercial buildings, but they will also boost [the] manufacturing base." —Rep. Bill Johnson of Ohio, at the Quanex Cambridge, Ohio, facility



  • Contact Information:Jeffrey Corum, managing director,, (312) 580-6282. Lincoln International specializes in merger and acquisition advisory services, debt advisory services, private capital raising and restructuring advice on mid-market transactions. Lincoln International also provides fairness opinions, valuations and pension advisory services on a wide range of transaction sizes. With 14 offices in the Americas, Asia and Europe, Lincoln International has strong local knowledge and contacts in key global economies. The firm provides clients with senior-level attention, in-depth industry expertise and integrated resources. By being focused and independent, Lincoln International serves its clients without conflicts of interest. More information about Lincoln International can be obtained at The analysis above is for your information only and is not an offer to sell or a solicitation of an offer to buy the securities or instruments mentioned or described in this report. The information has been obtained or derived from sources believed by us to be reliable, but we do not represent that it is accurate or complete. Any opinions or estimates contained in this information constitute our judgment as of this date and are subject to change without notice.