This building materials company recently announced a new acquisition—Heritage One Door & Carpentry. The stock is trading at a discount, earnings estimates are rising, and analysts at Evercore ISI Group recently upgraded the shares to ‘Outperform’.
BMC Stock Holdings, Inc. (BMCH)
From Upside
A leading supplier of building materials to the residential construction market, BMC Stock Holdings, Inc. (BMCH) sells millwork, doors, and whole-house framing solutions, which save builders time and expense. The company also offers design and installation services. Serving national and regional builders, BMC operates in 19 states, focusing on fast-growing markets in Texas, California, and Georgia.
BMC earns the maximum Quadrix® Overall score of 100, aided by an 83 in Value. At 12 times trailing earnings, the stock trades 37% below its five-year norm and 12% below its peer-group
median of 14. Unfavorable lumber prices and lower profit margins are expected to impact full-year results.
In 2018, lumber and lumber sheet accounted for 35% of revenue. For 2019, sales are expected to dip 3%, with per-share earnings down 9% to $1.81. But that figure has jumped $0.16 over
the past month. For 2020, per-share earnings are expected to climb 6% to $1.91. We are starting BMC with a Buy rating
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, September 2, 2019