This Construction Stock is Ready for Growth

constructionAmerica’s home market is likely to recover before the rest of the economy. Growth in recent weeks, particularly in new home construction, has investors bullish about some of the most promising homebuilder stocks. BlueLinx Holdings Inc. (NYSE: BXC) is a major distributor of building and industrial products. These range from plywood and strand board to lumber, rebar, and structural wood products.

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This stock is up more than 180% over the last three months, reflecting the growing confidence in the home market. Investors have been attracted to the affordable price and high potential of this stock. While it has outperformed its target of $25.00, it is likely to continue its climb if earnings maintain the current path.

The company generated $699 million in net sales in the second quarter, contributing to an adjusted EBITDA of $31 million. This was a 24% increase compared to 2019. The gross margin was reported at 14.4%, the highest it has ever been. Analysts predict that earnings will grow by as much as 139% per year at least through to 2021.

A reasonable price and an expectation for growth make this one of the strongest construction picks in the fourth quarter.

Key Data:

  • 1 Year Price Growth: -14.77%
  • YTD Price Growth: 93%
  • 3 Month Price Growth: 69%

All information is based on current and historical market data, as well as publicly available financial data. As with any financial decision, your own research is important. Stock market outcomes can never be 100% accurately predicted. Familiarity with historical data, individual industries, and individual stocks is key to developing a robust portfolio. Note that stock prices can fluctuate rapidly during trading sessions.

 

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The reports, research and newsletter are based on current and historical market data, as well as publicly available financial data.They are intended to be a starting point for investors. They do not provide every material fact about a company or industry, nor are they recommendations to buy or sell. The writers and the company make no warranties or representations as to the accuracy of these reports.   You should NOT rely solely upon the information or opinions read in the content. Rather, you should use the content as a starting point for doing independent research on the independent analysis and trading methods in the content. The content is impersonal and does not provide individualized advice or recommendations for any specific reader or individual portfolio. By accessing this website you have agreed to our disclaimers and privacy policy.

 

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