There is a strong correlation between $Masonite(DOOR)$ revenue and the US Housing Starts. While the historical performance was good, it does not reflect the poorer long-term US Housing Starts cyclical performance.
Strong correlation
DOOR benefited from being in the uptrend leg of the Housing Starts cycle. When the Housing Starts enters the downtrend leg of its cycle, DOOR revenue will follow the decline.
There is a strong correlation between revenue, gross profit margins, and gross profitability. When revenue declines so will these margins and returns. At the same time, SGA appears “sticky.
A valuation of DOOR over the cycle shows that there is no margin of safety.
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Comments
$美森特(DOOR)$ which price range do you think it’s good to buy?
It’s really a strong correlation as we can see clearly.
Just wondering what is the Housing Starts cycle?