The Lawson Products (NASDAQ:LAWS) business model of providing maintenance and repair supplies to a broad range of industries, has impressed investors over the years. Insiders and institutional investors are showing their confidence in the future fundamentals of Lawson Products. Their major shareholders are also increasing the stake; Private Discipline Master Lkcm recently acquired 120,000 shares at an average price of $25.00 per share.
LAWS share price rose more than 7% in Thursday trade on shares acquisition news, sending the year to date share price rally to the highest level in the last 52-weeks. Its shares are trading around $26.50 at present, up 11% in the previous month.
Zacks Investment Research has raised its price target for Lawson Products to a “buy” from a “sell” rating and set a target price at $28.00.
Business Strategies Supports Lawson Products Uptrend
Lawson’s management has been actively working on the strategy of buying small companies that are aligning to its business model and strategic objectives. The company recently acquired The Bolt Supply House in the third quarter, the acquisition contributed $8 million to the overall sales of $80 million in the final quarter of 2017.
The company’s strategy of investing in organic growth opportunities also resulted in organic growth of 8.3% in Q4, compared to the same period last year. Consequently, the company posted overall sales growth of 20% in the fourth quarter over the past year period.
Gross margin and operating margin strengthened from previous periods amid cost-cutting and investing in higher margin opportunities. Its gross margin increased 16% in Q4 while selling and general expenses decreased at a double-digit rate.
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Mr. DeCata, CEO of Lawson Products said: “As demonstrated by our 2017 results we have a scalable infrastructure in place to drive additional levels of profitability and a scalable plan to drive organic and acquired sales growth”.
Featured Image: LawsonProducts
