Builders FirstSource (NASDAQ:BLDR) is presenting an opportunity to buy a dollar for 50 cents. Even after a huge rally in the share price since 2011, I estimate that it has over 2x upside potential to its mid-cycle intrinsic value. Builders FirstSource is a small-cap company that manufactures structural building products for residential new construction. It is an under-the-radar play on the housing recovery. I recently purchased shares as the stock declined 18% from its 52-week highs on concerns about rising mortgage rates and the pace of the housing recovery. In this article, I will explain my investment thesis and the company's upside potential.
A brief overview of the company:
"Headquartered in Dallas, Texas, Builders FirstSource is ...
|FREE||SA PRO MEMBERS|
|IDEA GENERATOR||X||Exclusive access to 10 PRO ideas every day|
|INVESTING IDEAS LIBRARY||X||Exclusive access to PRO library of more than 15,000 ideas|
|SECTOR EXPERT NETWORK||X||Exclusive access to all sector experts for direct consultation|
|PERFORMANCE TRACKING||X||Track performance of all PRO stock ideas|
|PROFESSIONAL TOOLS||X||Professional Idea Filters to zero-in based on industry, market cap and more|