Our first stock idea is rated ‘Buy’ by Zacks, based on rising earnings estimates and value. The next two are sales of previous recommendations.
Buy: Builders FirstSource (BLDR)
From Upside
Operating in 40 states, Builders FirstSource (BLDR) claims it is the largest U.S supplier of building products to residential homebuilders. A healthy labor market, low interest rates, and pent-up demand are driving housing starts and boosting profits.
December-quarter earnings per share were $0.16, up from breakeven and above the consensus of $0.09. Continued growth seems likely. In February, CEO Floyd Sherman said, “We are focused on growing our business in 2017, with an emphasis on revenue expansion, gaining market share, and continuing to expand our operating margins.”
The stock earns the maximum Quadrix® Overall score of 100. The company operates in a notoriously cyclical industry, with results impacted by inclement weather and fluctuations in mortgage rates. Still, the consensus of 10 analysts expects 2017 profits to jump 28% to $1.06 per share.
Earnings outstripped the consensus by $0.07 in the December quarter and by $0.23 in the third quarter. Builders FirstSource is being initiated as a Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, April 2017