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BlueLinx Holdings: Sizzling Q1 Earnings, Get 8% Yield Over The Next Few Months

May 04, 2022 3:42 AM ETBlueLinx Holdings Inc. (BXC) Stock17 Comments


  • BlueLinx Holdings reports Q1 2022 results that were meaningfully better than even the most bullish investors could have hoped for.
  • As I previously argued, buying companies where their balance sheets are rapidly improving, is an awesome position to be invested in.
  • BlueLinx is still priced at approximately 3x earnings. Surely, that has to be cheap enough?
  • Management believes this is incredibly cheap and has an accelerated share repuchase program to buy up 8% of its market cap over the next several months.
  • As always, happy to discuss my thesis further in the comments section.
  • Looking for more investing ideas like this one? Get them exclusively at Deep Value Returns. Learn More »
Construction Site

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Investment Thesis

BlueLinx Holdings (NYSE:BXC) is a wholesale distributor of building and industrial products. It is very well positioned to benefit from two different dynamics. On the one side, you have a massive amount of pent-up demand for single-family housing, which requires a

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Michael Wiggins De Oliveira is an energy specialist whose primary focus is capitalizing on “the Great Energy Transition” - the confluence of decarbonization, digitalization with AI, and deglobalization - to achieve greater investment returns. Through his 9+ years analyzing countless companies, Michael has accumulated outstanding professional experience in the energy sector and a following of over 40K on Seeking Alpha.

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Comments (17)

Well, here we go again. How many blowout quarters have we had and yet the stock is now down 15% in 5 days.

The shorts are at it again.
hepoberman profile picture
Wow. I've been saying this was a hundred dollar stock (while my wife rolled her eyes). I didn't think it would do it overnight though and now my covered calls are in the money at 80 and 90. I can't win for losing!
Damon Judd profile picture
Darn, the market finally figured out this stock was undervalued. Up 28.5% at market close.
Now let's see if $BLDR can pull off an earnings beat this good when they report. BXC and BLDR are 2 of my top picks for 2022 in the homebuilding/commercial construction industry. And $TGLS is another one with great potential who also just reported a good quarter.

Um, if they match the first quarter the eps for the year will be $52 right ?
fazsha profile picture
@Wellington999 Yes; I dare you to find another stock with the kind of PE Bluelinx is rockin'.
fazsha profile picture
I just discovered this stock last week, and boy am I glad I did!
lakelin.rud profile picture
@fazsha bet you’re even more glad with the insane spike today hahaha
fazsha profile picture
@lakelin.rud Never had a day like this one before!
lakelin.rud profile picture
@fazsha same here, cashed out at +44%… anyone know why it spiked like it did?
Envoy Global Research profile picture
BXC is a strange stock. For the last 18 months or so, the market has been pricing this stock as if every earnings report was a one-time gain. The market seems to think earnings will soon collapse. But, then every quarter, the earnings surprise to the upside. Personally, I do believe earnings will decline significantly in 2023, but I'm still not sure what the base case is here in a normal real estate market. Is it $8 per share? Is it $20? It's really difficult to value this company because nobody really knows what a normal environment will look like for BXC or how they will do if real estate slows significantly. Now if the current environment lasts a few years, then this stock is ridiculously cheap. Certainly, the stock is more volatile than the earnigns seems to warrant.
@Envoy Global Research I believe the market is erroneously still associating the stock price to the price of lumber. Mgmt has moved co away from that, lumber prices do impact bottom line but not as much and they can still make 10% gross margin on the commodity side of the business when lumber prices are tanking as we saw last year and they have hinted for Q2. It is a distributor of building materials not only for housing starts but also renovation and remodel, which is a more resilient market. It is my #1 portfolio position by far.
Cfvaughnii profile picture
@tatensolo The market shoved BXC back down after the last 3 great earnings releases. I rode my shares down from the last time they were in the 90s, and was hurting. I loaded up more, and got rewarded. Now I'm out at 95. I will load back up when price moves settle down.
The avg price that BXC will pay as part of the $60M accelerated plan won’t be known until it ends. Would be 8% if avg price is $75 but may be more if pps takes off and in that case the % will be less. I hope they spend the other $30M fast if they see housing market holding up because the pps will take off. Long big BXC.
Michael Wiggins De Oliveira profile picture

^^That's a fair consideration.

Essentially, if you make more on share price going up, you make less on the buyback percentage.
4 X 13 = 52
Michael Wiggins De Oliveira profile picture

Yeah, it doesn't work like that sadly. There's a lot of seasonality in the business.

Thanks for commenting.
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