Stock Building Supply Holdings (STCK) represents an undervalued and attractive way to play the ongoing recovery in single-family housing, which we expect will drive a material recovery in profits. We believe that strong end market growth, coupled with opportunities to gain market share via value-added products and services initiatives, should allow the company growth revenue at an accelerated pace over the next 2-3 years. With shares trading at a depressed 5.1X our 2015E EV/EBIT multiple vs. 7.5x for building products companies and double-digit multiples for other housing-levered suppliers and retailers, we see upside of 45-100% over the next twelve-months as investors begin to appreciate the merits of STCK and confidence in the housing recovery builds.
STCK is a leading regional...
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