Quanex Building Products: Cheap, But With Some Notable Headwinds

(8min)

Summary

  • Quanex Building Products could be undervalued, trading at a low P/E ratio with a 2% dividend yield, after the shares lost over half their value in 12 months.
  • The company acquired Tyman for approximately $1 billion in 2024, aiming for a global scale and $30 million in annual synergies, boosting its strategic position.
  • Recent results showed improved gross margins and EBITDA, with revenues up 67% YoY thanks to the Tyman purchase, though organic sales declined slightly due to lower volumes.
  • Potential headwinds include tariff impacts and high new home inventory levels, affecting profitability and future growth plans for building product manufacturers.
  • An analysis of Quanex Building Products follows in the paragraphs below.
  • Looking for a helping hand in the market? Members of The Insiders Forum get exclusive ideas and guidance to navigate any climate. Learn More »
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Today, I am putting Quanex Building Products Corporation (NYSE:NX) in the spotlight for the first time. While the Building Products sector faces many current headwinds, this equity appears it might have gotten oversold. The stock from a P/E valuation ratio perspective is dirt

Author's note: I present an update my best small and mid-cap stock ideas that insiders are buying only to subscribers of my exclusive marketplace, The Insiders Forum. Our model portfolio has more than doubled the return of its benchmark, the Russell 2000, since its launch.  To join our community and gain access to our market beating returns, just click on our logo below.

This article was written by

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We are a team of analysts led by Bret Jensen, Chief Investment Strategist at Simplified Asset Management.

We run the investing group The Insiders Forum where we specialize in small and mid-cap stocks that insiders are buying. The Insiders Forum portfolio managed by Bret Jensen consists of 12-25 top stocks in different sectors of the market that are attractively valued and have had some significant and recent insider purchases. Our goal is to outperform the Russell 2000 (the benchmark) over time.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of NX either through stock ownership, options, or other derivatives. 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.

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