Profitable Investment Opportunities In A Fragile Housing Market [Builders FirstSource, Inc., The Home Depot, Inc.]

With a market cap of $762 million, the company is much smaller than The Home Depot, but it also affords better upside potential.

Builders FirstSource focuses on the residential new-home construction housing market.

The company produces structural and related building products, such as roof and floor trusses, wall panels, stairs, aluminum and vinyl windows, custom millwork, and pre-hung doors.

In the company’s network are 53 distribution centers and 47 manufacturing facilities that are situated primarily in the southern and eastern United States housing markets.

Builders FirstSource Chart

Chart courtesy of www.StockCharts.com

The company has managed to expand its annual revenues over the past four years to 2013, including revenue growth of more than 40% to $1.59 billion in 2013.

The next few years are also looking good, with an estimated revenue growth of 15.7% to $1.72 billion this year, followed by a 16.8% jump to $2.01 billion in 2015, according to Thomson Financial.

At the end of the day, while the homebuilder stocks look fragile, I continue to like the building supplies companies, such as The Home Depot and Builders FirstSource, as an investment opportunity.

This article is brought to you courtesy of George Leong from Profit Confidential.

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