27-06-2023, 10:45 AM
The US Homebuilding sector is cyclical and I believe that it is going into the downtrend leg of the next cycle. Apart from hunting for opportunities in the homebuilding sector, I thought that there should also be opportunities in the companies supplying to them.
That is why I started to look at US building materials companies. Builders FirstSource is one of them. This is a company with a good revenue growth.
My analysis showed that its revenue growth was driven mainly by acquisitions. But this revenue growth has not translated to competitive operating advantages.
![[Image: BLDR.png]](https://i.postimg.cc/XqQxxqKR/BLDR.png)
That is why I started to look at US building materials companies. Builders FirstSource is one of them. This is a company with a good revenue growth.
My analysis showed that its revenue growth was driven mainly by acquisitions. But this revenue growth has not translated to competitive operating advantages.
I carried out a Greenwald Asset Value vs Earnings Power Value comparison to determine its growth status. The Greenwald analysis based on the normalized scenario showed that it is not a high-growth stock. There is no margin of safety based on Greenwald return formula.
If you want to see insights for other US building materials companies, I have infographics of them in Are these outstanding stocks - what to consider? (Other Stock Exchanges)