Builders FirstSource (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 ...