Entering text into the input field will update the search result below

Boise Cascade: Better Prospects But Still Not Time To Buy

Hong Chew Eu profile picture
Hong Chew Eu


  • Based on FYE 2020 results, BCC has an improved long-term ROE. Given its 0.96 correlation with Housing Starts, it has better prospects for the next few years.
  • BCC has a higher valuation based on the updated ROE and latest valuation datasets. But there is still no margin of safety at the current price.
  • But I caution any valuation based on datasets derived with last year’s inputs as the pandemic year is not a good reflection of the future.
  • Wood product prices are cyclical and are expected to decline. With 0.73 correlation between product prices and BCC share price, there will be a buying opportunity when product prices come down.

Photo by akkachai thothubthai/iStock via Getty Images

Investment Thesis

Boise Cascade Company (NYSE:BCC or the Group) had fantastic FYE 2020 results due to improved Housing Starts and better product prices. This has resulted in the long-term ROE for BCC improving from

This article was written by

Hong Chew Eu profile picture
BSc (Eng), MBA. Self-taught value investor with 2 decades of investing experience. Blogger at i4value.asia. The blog is on value investing through case studies where I analyze and value listed companies in the ASEAN and US regions. I have an exceptional perspective having served as a Board member of a Malaysia listed company for several decades. I have value investing book "Do you really want to master value investing?" on Amazon

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (6)

Skate to where the puck is going. 2021 will be a record year for new home construction. This is a great opportunity to be able to buy a quality company in a booming business for 10 times earning. I would say our share price will be in the 80s by end of the year.
Harry Livermore profile picture
from your lips to the market's ears! ;)
Hong Chew Eu profile picture
@westside3 If you are a momentum or trend investor, that would be the right approach. Unfortunately, I have not been very successful investing based on trendlines or momentum so I will stick to being a value investor. And from a value investing perspective, BCC has no margin of safety. I think the biggest challenge of investing is to stick to your investment style.
Harry Livermore profile picture
Clearly, the time to buy is when it's undervalued, as I did during the first half of 2019 and during the COVID correction. My basis is in the low 20s. If BCC dips again, I may buy more. If not, I have the old Ben Graham "margin of safety". Long BCC and holding for now.
Good evaluation, author. A nice graphic might have been the share price of BCC overlaid with both housing starts and wood product prices.
Hong Chew Eu profile picture
@Harry Livermore I did think of having the share price, housing starts, and wood product prices on one chart but decided against it. BCC revenue is correlated with housing starts - a business fundamentals relationship. BCC share price is correlated with wood product prices - a pricing relationship. The business fundamentals and share price are on different "axis" and putting them on one chart would suggest that there is a relationship between business fundamentals and share price. I wasn't so sure about such a relationship. I know that in the long run, the share price would reflect the business fundamentals. But the correlation values were so high that I thought it was too good to be true.
Harry Livermore profile picture
@Hong Chew Eu
Sounds good. I am an amateur but when I learned stock analysis I was taught that revenue ("business fundamentals") ultimately drive share price ("pricing relationship")
It would seem to me that housing starts equals volume of revenue, and pricing of the product equals profitability (unless the pricing is driven by BCC's costs, in which case it's neutral) but both contribute to share price expansion.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About BCC

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on BCC

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.