Seeking Alpha: Wall Street Wants To Like Headwaters, But Should You?

I think everybody has a relative that won't ever let you get past who/what you used to be - it's probably one of those shared human experiences. I find myself slipping into that bad habit when I look at Headwaters (HW). I made some very good returns off this stock many years ago, back in the day when it was a coal treatment company with supposedly exciting catalyst technologies in the works. Management may have seen the writing on the wall with respect to the future of "clean coal," but the company's debt-fueled ventures into building products amidst the housing boom put this company into a bad spot for a number of years.

Now things are different. Headwaters is largely a residential building products company, but with some significant leverage to commercial and infrastructure construction as well. At the same time, the company has made some real strides in improving its debt situation and margin leverage. All of that aside, the sell-side has hiked its target on these shares by almost 100% over the past year (while the stock has climbed more than 40%) and it's worth wondering whether or not a large part of the housing recovery is already baked into the numbers.

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Wall Street Wants To Like Headwaters, But Should You?