BlueLinx From Tailwind To Headwind

seekingalpha04-01

BlueLinx's financials are signaling that the tailwinds of COVID-19 are over in the building sector.Net sales and gross profit are on the decline.Despite a huge increase in share price, we believe BXC ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2424737476?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/172872498/image_172872498.jpg","is_english":true,"pubTime":"2024-04-01 11:59","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2424737476","market":"nz","top_or_hot":-1,"title":"BlueLinx From Tailwind To Headwind","media":"seekingalpha","content":"<div>\n<p>BlueLinx's financials are signaling that the tailwinds of COVID-19 are over in the building sector.Net sales and gross profit are on the decline.Despite a huge increase in share price, we believe BXC ...</p>\n\n<a href=\"https://seekingalpha.com/article/4681404-bluelinx-from-tailwind-to-headwind\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>BlueLinx From Tailwind To Headwind</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBlueLinx From Tailwind To Headwind\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-01 11:59 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4681404-bluelinx-from-tailwind-to-headwind><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>BlueLinx's financials are signaling that the tailwinds of COVID-19 are over in the building sector.Net sales and gross profit are on the decline.Despite a huge increase in share price, we believe BXC ...</p>\n\n<a href=\"https://seekingalpha.com/article/4681404-bluelinx-from-tailwind-to-headwind\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FWD.AU","symbol_name":"FLEETWOOD LTD","start_time":0,"source_url":"https://seekingalpha.com/article/4681404-bluelinx-from-tailwind-to-headwind","article_id":"2424737476","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/172872498/image_172872498.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2424737476","pubTimestamp":1711943940,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"BlueLinx's financials are signaling that the tailwinds of COVID-19 are over in the building sector.Net sales and gross profit are on the decline.Despite a huge increase in share price, we believe BXC ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FWD.AU":"FLEETWOOD LTD","EXP":"Eagle Materials Inc","BCC.AU":"BEAM COMMUNICATIONS HOLDINGS","BK4588":"碎股","CFA.SI":"NikkoAM-STC Asia REIT","BK4221":"木材房地产信托","TTM":"塔塔汽车","LU1814569148.SGD":"WELLINGTON GLOBAL QUALITY GROWTH \"D\" (SGDHDG) ACC","LU0868494617.USD":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) ACC","IE00B64QTZ34.USD":"NEUBERGER BERMAN US SMALL CAP \"A\" (USD) ACC","BK7104":"黄金","BK7056":"通信设备","BK4186":"林业产品","TTM.AU":"TITAN MINERALS LTD","BK4561":"索罗斯持仓","BLDR":"Builders FirstSource","BK7014":"住宅建筑","BK7146":"消闲设施","BK4104":"贸易公司与经销商","LPX":"路易斯安那太平洋","BCC":"Boise Cascade L.L.C.","FWD":"AB DISRUPTORS ETF","BK4099":"汽车制造商","WY":"惠好","BK4567":"ESG概念","BK4585":"ETF&股票定投概念","BK4086":"建筑产品","BXC":"布鲁林克斯","BK4523":"印度概念","BK4084":"特种房地产投资信托","BK4011":"建筑材料","EXP.AU":"EXPERIENCE CO LTD"},"translate_title":"从顺风到逆风的蓝鸟","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BCC.AU":1,"WY":1,"TTM.AU":1,"TTM":1,"LPX":1,"FWD.AU":1,"FWD":1,"EXP.AU":1,"EXP":1,"BXC":1,"BLDR":1,"BCC":1,"CFA.SI":0.71,"US10Y.BOND":0.61,"US12M.BOND":0.61,"US2Y.BOND":0.61,"US30Y.BOND":0.61,"US3Y.BOND":0.61,"US5Y.BOND":0.61,"US6M.BOND":0.61,"US7Y.BOND":0.61,"US912797FS14.BOND":0.6,"US912797FH58.BOND":0.6,"US912796CX52.BOND":0.6,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6,"US912797HG57.BOND":0.6,"US912797HH31.BOND":0.6},"content_text":"BlueLinx's financials are signaling that the tailwinds of COVID-19 are over in the building sector.Net sales and gross profit are on the decline.Despite a huge increase in share price, we believe BXC is still fairly valued.carterdayne BlueLinx Holdings (NYSE:BXC) is a distributor of residential and commercial building products with a focus on lumber and other wood products. The company has had a strong run over the last year up over 80% and reaching price levels they haven't seen in over 15 years. Unfortunately, the financials don't paint as rosy of a picture as this large increase in share price would lead you to believe. We believe that at their current price, they are fairly valued when comparing them to the industry average but that their growth story has come to an end leaving them with a HOLD rating. BlueLinx 2023 Performance -Net sales were down 29.5% year over year and down 16% in quarter 4. -Gross Profit was down 36.7% year over year. -Gross margin of 16.8%, down 190 bps year over year -Completed $42 million in share repurchases, reducing shares outstanding by 6%. -The company did report a net loss of $18 million but that was due to a one-time $30.4 million charge related to their pension benefit plan. -Generated operating cash flow of $306 million down from $400 million in 2022. At best you could call these results a mixed bag, while net sales and gross profit are both down, they are still left with significant free cash flow to continue to repurchase shares and invest in the business. Housing Construction Trends BlueLinx is largely affected by the macro trends in new home construction and existing home remodels. When you look forward to the rest of 2024 we are once again handed another mixed bag at best. The company anticipates that new home starts will creep higher over the next three years and hover around the 20-year average. They also expect that existing home remodels will begin to trend lower. So once again you are left with a mix of positives and negatives. Company Presentation Looking Forward On their recent earnings conference call management stated that so far in quarter 1 they have been able to maintain solid margins in line with what we were seeing in quarter 4 of 2023. Unfortunately, it sounds like we should also expect further declines in gross profit due to daily volume impacts caused by extreme weather patterns in January. We will have to wait and see if these are in line with typical Q1 seasonal declines or if this is a further decline from Q1 2023. Thesis BlueLinx is a company that was able to ride the tailwinds of the COVID-19 housing boom and is now facing the headwinds of higher interest rates and decreasing lumber costs. Fortunately, the Federal Reserve has signaled that rates should begin to come down this year with that continuing into next year. Lower mortgage rates should help spur home sales which would lead to an increase in repair and remodel spending. While BlueLinx is somewhat at the mercy of the Fed to continue their growth in their current markets we believe that they are fairly priced at their current valuation.   Company P/E (TTM) P/E (FWD)   BlueLinx (BXC) 24.16 16.14   Boise Cascade Company (BCC) 12.65 13.48   Weyerhaeuser Company (WY) 31.32 34.5   Eagle Materials (EXP) 19.2 19.1   Louisiana-Pacific Corporation (LPX) 34.11 21.2   Builders FirstSource, Inc. (BLDR) 17.47 17.18   Average 23.15 20.27   Click to enlarge  This table compares BlueLinx's P/E to other companies in the building materials space. Showing that as far as valuation they are right around average for the industry. We believe this run-up over the last few years fueled by post covid low interest rates and a boom in new home builds and remodels has come to an end. Fortunately, even after this huge runup in share price, BlueLinx is still very reasonably priced. Unfortunately for BlueLinx, it appears the growth story is over interest rates are still at their highest levels in several years and new home starts have been trending down since their 2021 high. If the Fed is to be believed then rates should begin to drop later this year, but it seems unlikely, we will see them drop anywhere below the 20-year average anytime soon. With the end of Q1 already here we should expect to see further decreases in gross profits on their next earnings report but those are most likely priced in due to seasonal factors typically seen in Q1. For now, we are rating BlueLinx a hold due to the fundamental business being strong, but would we need to see increases in net sales and gross profit before considering changing our rating to a buy.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2424737476"}