Cash In On The Building Boom With Builders FirstSource

Summary

• 100% Technical buy signals.
• 11 new highs and up 21.17% in the last month.
• 99.01% gain in the last year.

PeopleImages/E+ via Getty Images

The Barchart Chart of the Day belongs to the construction products company Builders FirstSource (NYSE:BLDR). I found the stock by using the Value Line Investment Survey screener to find the stocks that are in the 100th percentile in their Price Growth Persistence ranking. They rank almost 4100 stocks for their Price Growth Persistence so these are the best in their view. I loaded that list into Barchart, then sorted for the highest Weighted Alpha and technical buy signals and used the flipchart feature to review the charts for consistent price appreciation. Since the Trend Spotter signaled a buy on 10/7, the stock gained 53.52%.

Builders FirstSource, Inc., together with its subsidiaries, manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States. The company operates through four segments: Northeast, Southeast, South, and West.

It offers lumber and lumber sheet goods comprising dimensional lumber, plywood, and oriented strand board products that are used in on-site house framing; manufactured products, such as wood floor and roof trusses, steel roof trusses, wall panels, stairs, and engineered wood products; and windows, and interior and exterior door units, as well as interior trims and custom products under the Synboard brand name.

The company also offers gypsum, roofing, and insulation products, including wallboards, ceilings, joint treatments, and finishes; and siding, metal, and concrete products, such as vinyl, composite, and wood siding products, as well as exterior trims, other exteriors, metal studs, and cement products. In addition, it provides other building products and services, such as cabinets and hardware, as well as turn-key framing, shell construction, design assistance, and professional installation services. The company was formerly known as BSL Holdings, Inc. and changed its name to Builders FirstSource, Inc. in October 1999. Builders FirstSource, Inc. was founded in 1998 and is based in Dallas, Texas.

Barchart's Opinion Trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 20 minutes and can therefore change during the day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report.

Barchart technical indicators:

• 100% technical buy signals
• 129.13+ Weighted Alpha
• 99.01% gain in the last year
• Trend Spotter buy signal
• Above its 20, 50 and 100-day moving averages
• 11 new highs and up 21.17% in the last month
• Relative Strength Index 69.79%
• Technical support level at 84.08
• Recently traded at 84.05 with a 50-day moving average of 70.64

Fundamental factors:

• Market Cap $16.30 billion
• P/E 9.92
• Revenue expected to grow 128.50% this year.
• Earnings estimated to increase 201.00% this year and continue to increase at an annual compounded rate of 18.80% for the next 5 years.
• Wall Street analysts issued 10 strong buy and 3 buy opinions on the stock.
• The individual investors following the stock on Motley Fool voted 238 to 52 that the stock will beat the market with the more experienced investors voting 48 to 4 for the same result.
• 7,910 investors are monitoring the stock on Seeking Alpha.

The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio, it is highly suggested you follow a predetermined diversification and moving stop-loss discipline that is consistent with your personal investment risk tolerance and reevaluate your stop losses at least on a weekly basis.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in BLDR over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Comments

[user43812966]

I don't understand why you say it is such a good stock/company but do not own any. You must not have spotted it back on 10/7 (as above) when it first signaled a buy. The stock has pulled back to 70 which looks like a possible entry.

[Jim Van Meerten]

@user43812966 Even I only have a limited amount of money. I usually hold 10 - 20 positions and hold each till my sell point is hits. I wish I could buy them all

[OverTheHorizon]

Old news already priced in. Buy CNR with same dynamics and much more upside potential.

[GARPdude]

@OverTheHorizon You seem to be commenting on many articles urging people to buy CNR. Are you affiliated with the company or heavily invested in it?

[OverTheHorizon]

@GARPdude sorry. I think it’s an undervalued way to play the housing market. I’ll curb my enthusiasm. thanks for pointing it out.

[GARPdude]

@OverTheHorizon It does seem undervalued compared to sector median. I’m looking into it and BLDR. Do you think there is more steam in this housing market rally? Wouldn’t high interest rates cause a drop in property sales as mortgages become more expensive?