We took a look at an alternative to big cap Home Depot (HD). In that article, I told you to buy BLDR instead to save big on each share.
Since then, investors in Builders FirstSource are up over 106%! Not too shabby of a return over the past two years…
Back then, I told you that BLDR was poised to rally as the housing recovery was taking hold, and more and more building supplies would be moving out the door at home improvement stores. Obviously that call was dead on and it helped lift share prices.
But should you be investing in this company now? Let’s take a closer look…
If you’re not familiar with them, BLDR is a company specializing in home building and remodeling products. And as you know, remodeling has become the best way to upgrade your home which has turned both Home Depot and Lowe’s home improvement stores into the mainstream investments.
Builders FirstSource has a chain of building supply stores throughout the eastern and southern United States.
When looking at the company’s financials, investors have some decent highlights to consider. For instance, the stock sports a forward P/E of 10x. Also, the price to sales is attractive at 0.5x with sales at $1.5 billion.
On the flip side, net income has fallen back into the red at -$34 million. And based on recent results, BLDR is still losing money – but not nearly as much.
With earnings just out last week, the company reported a first quarter loss of just $3.3 million versus the $11.8 million loss the company had in Q1 of 2013. In addition, Builders FirstSource received another upgrade this past weekend from Gabelli & Co.
If you go back and re-read my previous article, the situation looks pretty familiar- the company had cut quarterly losses in half, and also received an analyst upgrade.
It’s looking like history is repeating itself. From my viewpoint, it looks like it could be a perfect time to buy shares of BLDR as the stock remains inexpensive when looking at both P/E and P/S ratios – not to mention the company is turning around profitability as I write.
Could it be another double from here? Only time will tell…
Keeping you one step ahead,